I concur in the result, but not in all that is said in the above decision. I disagree with the comments upon and the criticism of the plaintiff bank's methods of accounting, which in my opinion are neither correct nor within either the issues or this court's jurisdiction.
The sole question is the value of the capital stock of the bank on the first Monday in March, as represented by the value on that day of the bank's property exclusive of the real property, *Page 45 which is otherwise taxed. It seems obvious that if the item representing the real estate is stricken from the balance sheet showing all the assets, the real estate is completely eliminated so as to prevent double taxation. This is so, whether or not the balance sheet item is less or greater than the true or assessed value of the real estate.
The second point does not, as implied in the first opinion, involve the propriety of a "reserve for unearned interest;" it merely involves $3,788.81 of interest not accrued on the first Monday in March but included in the stated face value of notes representing "loans and discounts." Since that amount was then nonexistent as value the plaintiffs were entitled to have it deducted. However, the remaining $254,942.77 face value of notes contains no item representing the interest then actually accrued upon the notes and uncollected. Presumably on few was the interest paid to exactly the first Monday in March; their value as of that date actually exceeded their face value to the extent of the interest then accrued and unpaid. Three months' interest at the rate of six per cent. per annum on that amount would exceed the $3,788.81 sought to be deducted for interest included but not accrued; it is perhaps improbable that so much interest was accrued and unpaid upon that date, but neither the assessor nor this court has any way of ascertaining whether or to what extent it might offset the $3,788.81 deduction claimed. Consequently the plaintiffs have not shown that the notes were overvalued to that, or any, extent, and the assessment cannot be held erroneous.
Somewhat the same situation exists with reference to the third contention. Instead of attempting to revalue all the bonds to show their exact value on the first Monday in March, an account was set up which was intended to represent the reduction in value of all the bonds below the figure at which they were carried on the books. If all the bonds were on that date worth $7,631.59 less than the book value, that amount should have been deducted from the $480,123.01. The portion of the agreed statement of facts quoted in the first opinion above *Page 46 would indicate that all the bonds were then actually worth $9,595 less than that figure, and if so, the plaintiffs would be entitled to prevail upon this point. But further reference to the evidence shows that the $9,595 represents the reduction in value of only a few of the bonds. Since the stipulation shows that some of the bank's bonds showed a substantial appreciation over the balance sheet valuation as of that day, the showing obviously falls short of proving that the bonds as a whole were then worth $7,631.59 less than the value at which they appear in the balance sheet.
The last fifteen lines of the first opinion exemplify my chief objection that the opinion improperly, as well as incorrectly, volunteers an adjudication of accounting questions not before us nor within our jurisdiction. Most reserves for anticipated losses are made to cover losses which may never occur. But it obviously does not follow that the reserve is therefore improper; in fact conservative accounting practice requires that it be made. But whether the loss ever actually occurs does not here concern either the courts or the taxing authorities. We are concerned only with the value of the property on the first Monday in March; whether the value went up or down after that date and before sale by the bank is entirely immaterial in fixing the value on that date.
I concur in the result.
Rehearing denied May 18, 1944.