Commonwealth v. Virginia Bank & Trust Co.

Keith, P.,

delivered the opinion of the court.

The Virginia Bank and Trust Company presented its petition to the Corporation 'Court of the city of Korfolk, in which it shows, that on February 1, 1909, the capital stock of the bank was $600,000, the surplus $90,000, and the undivided profits $15,541.12, making the total of the capital, *559surplus and undivided profits $705,541.72; that the hank was at that time and still is the owner of a lot of land with the bank building thereon, in the city of Norfolk; that the lot and building had cost the bank the sum of $138,133.65, which sum represents the true value of said property on February 1, 1909, and that this building was placed in the assets of the bank at the figure $138,133.65 in making up the total of its capital, surplus and undivided profits of $705,541.72; that the commissioner of the revenue of the city of Norfolk, instead of deducting from the total of the capital, surplus and undivided profits the value of said real estate, namely, $138,133.65, in order to determine the value of the shares' of stock of said bank for taxation, deducted from the total of the capital, surplus and undivided profits $60,000, being the value at which said real estate was assessed for the purpose of taxation, the result of which was that the stock of the bank was assessed for the year 1909 at $642,000, when it should have been assessed at only $567,408; and that in consequence of said erroneous assessment made by the commissioner of the revenue the bank has paid to the State of Virginia, and is entitled to have refunded to it by reason of said erroneous assessment, the sum of $260.72. The petitioner, therefore, prays the court to correct said erroneous assessment and direct the repayment to petitioner of the sum of $260.72, in accordance with the facts as above set forth.

The corporation court granted the prayer of the petitioner held that it had been erroneously charged with the sum of . $260.72, and directed that that sum should be refunded to it. Upon the petition of Morton Marye, Auditor of Public Accounts, a writ of error was .aAvarded to that judgment.

The Acts of 1908, p. 325, provide that the value of the shares of stock of the defendant in error and other like corporations shall be ascertained by adding together its capital, surplus, and undivided profits, and that the actual value of each share of stock shall be its proportion of the aggregate amount. There ■can be no doubt that in this respect the law was complied with. *560The controversy arises over the amount to he deducted, the statute saying, “there shall be deducted the value of its real estate otherwise taxed in this State”; the contention upon the part of the Commonwealth being that this phrase has reference to the value at which the real estate is assessed for taxation, which in this case is $60,000, while the defendant in error contends that the word “value” refers to the actual value of the real estate otherwise taxed, and that there should be deducted from the aggregate of the capital, surplus and undivided profits the sum of $138,133.65, which is the actual value of the real estate.

In the Acts of 1902-3-é, p. 163, it is provided that “Erom the total market value of the shares of stock of any such bank . . . there shall be deducted the assessed value of its real estate otherwise taxed in this State, and the value of each share of stock shall be its proportion of the remainder; provided, that the market value of said stock shall be estimated at a sum not less than the aff?regate of the capital, surplus, and undivided profits of each such bank ... as shown by its last published statement prior to the first of February of each year, after deducting from such aggregate the value of its real estate otherwise taxed in this State.”

That section was amended by the Acts of 1908, p. 325, so as to read as follows: “Erom the total value of the shares of stock of any such bank . . . which shall be ascertained by adding together its capital, surplus, and undivided profits, there shall be deducted the value of its real estate otherwise taxed in this State, and the actual value of each share of stock shall be its proportion of the remainder.”

It will be observed that the first act is amended in two particulars: In the first act the market value of the shares of stock are the subject of taxation, with a proviso that the market value shall be estimated at a sum not less than the aggregate of the capital, surplus and undivided profits of such bank, as shown by its last published statement prior to the first of February of each year, after deducting from such aggregate the value of its *561real estate otherwise taxed in this State; while in the act of 1908 the market value is not referred to, hut the statute fixes its own method of ascertaining the value for taxation of the shares of stock in such institutions, and then provides that there shall be deducted the value of its real estate otherwise taxed in this State. The second act is not as explicit as the first, which leaves no room to doubt that the sum to be deducted is the assessed value of the real estate, for it is expressly declared that “from the total market value of the shares of stock of any such bank . . . there shall be deducted the assessed value of its real estate”; but it will be observed that at the conclusion of the proviso in the former act, in declaring what sum shall be taken from the aggregate of the capital, surplus and undivided profits, the phrase is used “after deducting from such aggregate the value of its real estate otherwise taxed in this State.” It cannot be supposed that the legislature intended to deduct the assessed value of the real estate from the market value of the shares of stock where the market value was the subject of taxation in the first clause, and deduct a different amount, to-wit, the actual value, in the event the value of the stock for taxation should come to be estimated in accordance with the terms of the proviso or concluding clause of the section.

Defendant in error contends that the words “otherwise taxed” in the statute have reference to the real estate, and not to the value of the real estate. We think they refer to and modify the entire phrase, “the value of its real estate otherwise taxed in this State,” for it is values and not real estate which after all is the subject of taxation.

We are also of opinion that the provision of the Constitution—section 182—has a decided bearing upon the subject. It reads as follows: “Until otherwise prescribed by law, the shares of stock issued by trust or security companies chartered by this-State, and by incorporated banks, shall be taxed in the same manner in which the shares of stock issued by incorporated banks were taxed by the law in force January 1, 1902; hut from the *562•total assessed value of the shares of stock of any such company ■or bank there shall be deducted the assessed value of its real ■estate otherwise taxed in this State, and the value of each share of stock shall be its proportion of the remainder.”

The first branch of this section, which provides that the law then in existence shall continue in force until otherwise pre•scribed by law, implies the power in the legislature to change the law. But it is also plain that the concluding clause of that section prescribes a limitation upon the power of the legislature with respect to the subject, and in effect declares that however the law may be altered and amended, whatever changes the legislature may see fit to prescribe, it shall always be provided that ■from the total assessed value of the shares of stock of any such, ■company or bank there shall be deducted the assessed value of its real estate otherwise taxed in this State, and the value of each •share of stock shall be its proportion of the remainder.

We reach the conclusion that, in addition to what we have already said, and in view of the terms of section 182 of the Constitution, the construction contended for by defendant in error would render the act of doubtful constitutionality; and upon -the whole case we are of opinion that the judgment of the corporation court should be reversed.

Reversed.