STATUTE OF LIMITATIONS-Continued.

rency decided on the 28th of June, 1876, that the enforcement of this lia-
bility to its full extent was necessary, and instructed the receiver accord-
ingly, and that this action was thereupon brought. Held, that although
such decision and order of the Comptroller were necessary preliminaries
to a suit against the shareholder; yet having been delayed without suffi-
cient apparent reason for more than six years from the date of the sub-
scription, the statute of limitation was a bar to the action - the State
courts having decided that an act necessarily preliminary to the commence-
ment of a suit upon a contract must be done within six years, unless suffi-
cient reason for the delay is shown. Price v. Yates, 204.

See JURISDICTION, 204; STATUTORY CONSTRUCTION, 209; TRANSFER OF

STOCK, 47.

STOCK.

Sale of collaterals.] See SALE, 1.

Specific enforcement for sale of.] See SPECIFIC ENFORCEMENT, 411; TAXATION.

STOCKHOLDERS.

1. Liability of colorable transferee.] S. bought shares in a National bank and
caused them to be transferred to E., who was in his employ, S. remaining
the real owner. Held, that S. was liable as stockholder upon the failure
of the bank. Davis, receiver, v. Stevens, 158.

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of pledgee of stock transfer to escape liability.] One to whom stock
had been transferred in pledge or as collateral security for money
loaned and who appears on the books of the corporation as the owner of the
stock, is liable as a stockholder for the benefit of creditors. Where the
owner, holder or pledgee of stock transfers it out and out for the purpose
of escaping liability as a shareholder to one who is unable to meet such
liability, or when the transfer is colorable and not absolute, the transfer is
ineffective as to creditors and the transferor will be still liable. There-
fore, when the G. Bank loaned money and took as collateral therefor shares
of stock in the C. Bank, which was duly transferred in the books of the
C. Bank, and afterward the G. Bank transferred these shares to one of
its clerks, with an understanding that he should re-transfer on request,
and the C. Bank was then in failing condition, held, that the G. Bank was
liable to contribute as a stockholder to the debts of the C. Bank. Ger-
mania Nat. Bank of New Orleans v. Case, receiver, 5.

holding as security.] One who procures a transfer to himself, on the
books of a National bank, of stock in such bank becomes liable for the
engagements of the bank as prescribed in the National Bank Act, although
such stock was pledged to him by the owner, simply as security for a
debt. Moore v. Jones, 144.

surrender of certificate.] One in whose name the shares of the stock
of a National bank stand on the bank-books is subject to the individual
liability of a shareholder, although his holding of the stock was originally

STOCKHOLDERS-Continued.

as collateral security for a loan, and the loan has been repaid, and the
stock certificate surrendered with an executed power of attorney for
transfer. Bowdell v. Farmers and Merchants' National Bank of Balti-
more, 146.

5. Standing in court.] Stockholders have no standing in court to interfere
for the protection of their company until the board of directors of the
company have neglected or refused an application to take the proper
steps to protect the interests of the company. Fifth National Bank of
Pittsburgh v. Pittsburgh and Castle Shannon Railroad Co., 190.

See ASSESSMENT.

SURPLUS.

See TAXATION, 296; REDUCTION OF CAPITAL, 340.

TAXATION.

1. Of shares-mode of valuation.] The provision of the National Bank Law
that State taxation on the shares of the banks shall not be at a greater rate
than is assessed on other money capital in the hands of citizens of the
State, has reference to the entire process of assessment, and includes
the valuation of the shares as well as the ratio of percentage charged on
such valuation. People ex rel. Williams v. Weaver, 57.

2.

3.

4.

5.

6.

-] A statute of a State, therefore, which establishes a mode of assess-
ment by which the shares of the National banks are valued higher in
proportion to their real value than other money capital, is in conflict with
the act of Congress, though no greater percentage is levied on that valua-
tion than on the valuation of other moneyed capital. Ib.

deduction of debts.] The statute of New York of 1866, which permits
a debtor to deduct the amount of his debts from the valuation of all his
personal property including moneyed capital, except his bank shares
taxes these shares at a greater rate than other moneyed capital, and is
therefore void as to the shares of National banks. Ib.

-] Although the statutes of a State provide for the valuation of all mon-
eyed capital for purposes of taxation, at its true cash value, including
shares of the National banks, the systematic and intentional valuation of
all other moneyed capital by the taxing officers far below its true value,
while National bank shares are assessed at their full value, is a violation
of the act of Congress which prescribes the rules by which those shares
shall be taxed by State authority. Pelton v. Commercial National Bank,
85.

injunction.] In such case, on the payment or tender of the sum
which the bank shares ought to pay under the rule established by the
act of Congress, a court of equity will enjoin the State authorities from
collecting the remainder. Ib.

] The Constitution of Ohio declares that "laws shall be passed
taxing by a uniform rule all moneys, credits, investments in bonds, stocks,

7.

TAXATION-Continued.

joint-stock companies, or otherwise; and also all the real and personal
property, according to its true value in money." And the legislature has
passed laws providing separate State boards of equalization for real estate,
for railroad capital, and for bank shares, but there is no State board to
equalize personal property, including all other moneyed capital. The
equalizing process as to all other personal property and moneyed capital
ceases with the county boards. Cummings v. Merchants' National Bank,

74.

-] Throughout a large part of the State of Ohio, including Lucas
county, in which the plaintiff bank is located, perhaps all over the State,
the officers charged with the valuation of property for purposes of taxa-
tion adopted a settled rule or system, by which real estate was estimated
at one-third of the true value, ordinary personal property about the same,
and moneyed capital at six-tenths its true value. The State board of
equalization of bank shares increased the valuation of these shares to
their full value. This court holds:

(1) That the act creating the board for equalizing bank shares is not
void as a violation of the Constitution of Ohio, because if the local assess-
ors would discharge their duty by assessing all property at its actual cash
value the operation of the equalizing board would work no inequality of
taxation, and a law cannot be held to be unconstitutional which in itself
does not conflict with the Constitution, because of the injustice produced
by its maladministration.

(2) The rule or principle of unequal valuation of different classes of
property for taxation, adopted by local boards of assessment, is in conflict
with the Constitution of Ohio and works manifest injustice to the owners
of bank shares.

(3) When a rule or system of valuation for purposes of taxation is
adopted by those whose duty it is to make the assessment, which is in-
tended to operate unequally, in violation of the fundamental principles of
the Constitution, and when this principle is applied not solely to one in-
dividual, but to a large class of individuals or corporations, equity may
properly interfere to restrain the operation of the unconstitutional exer-
cise of power.

(4) The appropriate mode of relief in such cases is, upon payment of the
amount of the tax which is equal to that assessed on other property, to
enjoin the collection of the illegal excess. Ib.

8. —] An assessment of tax on the stock of a National bank in New
Jersey, owned by a stockholder residing in the city where the bank is
located, cannot be sustained by the presumption that the stockholder
resided in the ward in which the bank was located, but the assessment
must be made against the stockholder. State, North Ward National
Bank, pros., v. Newark, 290.

9.

non-residents - National bank stock.] A statute empowering the
authorities of a town to impose the same taxes, for municipal purposes,
upon non-residents pursuing their ordinary avocations within the corpo-
VOL. II-77

TAXATION-Continued.

rate limits as upon the inhabitants, with a proviso that non-residents so
taxed shall have the right to vote at municipal elections, is not abrogated
by a change in the State Constitution which deprives the non-resident
tax payer of his vote, and authorizes a tax upon the shares in a National
bank, located in the town, and held by one who conducts his ordinary
business therein, but whose residence is in the county, outside the corpo-
rate limits. Moore ▼. Mayor and Commissioners of Fayettsville, 350.
10. place of] National bank shares, owned by residents, may be as-
sessed at their residence or at the location of the bank, as the State leg-
islature may direct, and a State law directing the assessment where the
person required to list them resides, is valid. Buie v. Commissioners of
Fayetteville, 343.

-

11. Capital stock -legal tenders.] Action to recover taxes. The defendant
was a State bank, with a capital of $1,000,000. It was possessed of less
than $200,000 worth of real estate. The plaintiff city assessed it, in ad-
dition to its real estate, for the sum of $700,000 as its capital or money at
interest. The bank refused to pay the tax, on the ground that its capital
not invested in real estate consisted of United States legal tender notes,
not taxable. Held, that the tax was lawfully levied. New Orleans Canal
and Banking Company v. City of New Orleans, 22.
12. Of State bank in transition to a National bank.] While a State bank is
changing to a National bank, and before the requirements of the State
statute are fully complied with, it is subject to State taxation. Common-
wealth v. Manufacturers and Mechanics' Bank of Philadelphia, 459.

13. National bank can be located in but one place.] A National bank located in
New Jersey, for the convenience of persons in Philadelphia, kept a clerk
in that city who received deposits. Held, that the bank did not become
located in Philadelphia so as to be liable to taxation. Nat. State Bank of
Camden v. Pierce, 177.

-

14. Bank building — when not liable to taxation for county purposes.] Where
part of the capital of a National bank is invested in a building used for
banking purposes, and the bank pays into the State tax prescribed upon
the par value of all its shares, the building cannot be taxed for county
purposes, although the cashier occupies a part of it as a residence.
County of Lancaster v. Lancaster County National Bank, 415.

15. Of deposits-compelling exhibition of books.] The officers of a National
bank cannot be compelled to exhibit the books of the bank to State officers
for the purpose of furnishing a basis for State taxation of the deposits as
against the depositors. First National Bank of Youngtown v. Hughes,
176.

16. Double.] A State may tax the real property or the capital stock of a Na-
tional bank, but not both. County Commissioners of Frederick County v.
Farmers and Mechanics National Bank of Frederick, 252.

17. License.] A city has no power to exact a license fee from a National bank.
City of Carthage v. First Nat. Bank of Carthage, Missouri, 279.

TAXATION-Continued.

18. Municipal — injunction of banking business.] A National bank is not sub-
ject to local municipal taxation of its business, and the enforcement of
such tax may be enjoined. Mayor, etc., of Macon v. First National Bank
of Macon, 219.

19. Remedy for illegal.] The assessment by a municipal corporation of a tax
upon the shares of a National bank in gross, or upon its capital stock, is
void, but the remedy is at law, and not by injunction, although the muni-
cipal corporation is insolvent. National Commercial Bank of Mobile v.
Mayor, etc., of Mobile, 440.

20. Reserve surplus taxable.] The surplus fund which a National bank is re-
quired to reserve from its net profits is not excluded in the valuation of
its shares for taxation. Strafford Nat. Bank v. Dover, 296.

21. Action against bank for tax on stock.] An assessment upon the capital
stock of a National bank in gross is invalid, and a provision that the same
shall be paid by each such association for the shareholders thereof," be-
ing dependent upon such invalid provision, and incapable of independent
enforcement, is also inoperative, and imposes no duty on the bank to
pay such tax. Sumter County v. National Bank of Gainesville, 449.

22. Receiver.] A tax levied on the property of a National bank subsequent to
its insolvency is subordinate to the rights of a receiver appointed after
such levy. Woodward v. Ellsworth, 216.

23. Of shares — remedy for illegal — constitutional law.] A State statute, inde-
pendent of and designed as a substitute for all other provisions for tax-
ation, which permits any debtor, assessed upon personal property, to de-
duct the amount of his debts from the valuation of all his personal prop-
erty, including money capital, except bank shares, is wholly unconstitu-
tional and invalid as to National bank shares, and affords no authority for
making any assessment upon such shares; and an injunction to restrain
the enforcement of such tax will issue at the suit of a bank the shares of
whose capital are thus illegally assessed against the shareholders. National
Exchange Bank v. Hills, *456.

Of circulating medium.] See CONSTITUTIONAL LAW, 100, 439,

TRANSFER OF STOCK.

1. Foreign executor.] In the absence of any provision in the by-laws or arti-
cles of association of a National bank to the contrary, such a bank is
bound under the laws of Pennsylvania to recognize a transfer of its stock
by a foreign executor duly appointed in another State. Hobbs v. Western
Nat. Bank, 187.

2. Refusal of cashier to permit ·limitation — payment of judgment for damages.]
B. having duly sold stock of a National bank of Louisiana pledged to him
by A., applied to the cashier to have it transferred on the bank books, but
the cashier refused, on the ground that A. was indebted to the bank. The
bank having failed before the transfer could be enforced, B. brought an
action of damages against the receiver. Held, (1) that the action was not
barred by the statute of limitation of one year; (2) the cashier having