On Rehearing.
Spencer, J.It will be seen by our former opinion in this case, that there is demanded of the bank taxes,
First, on §159,828 62 assessed as “ taxable assets over and above the capital stock,” and
Second, on §636,450 assessed to. the shareholders of said bank, as “ value of capital stock,” etc.
The taxes so assessed to the stockholders are demanded of the bank, under-the revenue act of 1878, which requires the banks to pay such assessments.
The bank resists both demands, on the ground that by its charter it is exempt therefrom.
1. We see no reason to doubt the conclusion that by section 4 of the act of January 30 th, 1836, the capital of the Citizens’ Bank is ex*245empt from taxation. “ The capital of said bank shall be exempt, etc., * * * during the continuance of its charter,” is the language used. That language is broad enough to cover every thing which during its existence should enter into and make part of the capital of said bank.
By the 29th section of the original charter, “ all the profits made by said corporation shall be added to and made a part of its capital,” except a certain fraction of any excess of profits over what was necessary to pay the bonds issued by the bank. It is not pretended that any such excess of profits exists, or ever has. As a matter of fact, the bank has never declared a dividend to its shareholders. This sum of $159,828 62 is accumulated profits, which, by the charter, enter into and become part of the bank’s capital, and is, therefore, exempt.
2. The shareholders of the bank have been assessed for the value of their shares or stock, and the tax thereon is demanded of the bank. Under the view we have taken of this case, it will be unnecessary to discuss the question so much argued by counsel, as to the right of the State to tax the shares of the shareholders. The bank has no mission to raise such a question, except so far as it may be necessary to protect itself. Even iE the shareholders be liable to taxation on their shares (upon which we express no opinion), under the peculiar and exceptional nature of the charter of the Citizens’ Bank we think it cannot be forced to pay the taxes assessed to its shareholders.
To enable this bank to obtain its capital, the State loaned it bonds to the amount of several millions ; which bonds were put upon the market 'and sold by the bank ; the bank binding itself to take them up at their maturities, and to pay the interest thereon as it accrued. In order to secure the State against loss, and guarantee the payment of the bonds, the mortgages and pledges given by the stockholders to secure their subscriptions and loans were transferred to the State and the bondholders. All profits were to be capitalized, except as above mentioned. No dividends were to be distributed, except out of a small fraction of any surplus of profits, after meeting and paying' the maturing bonds and interest.
It is, we think, manifest that the bondholders are to be paid out of the profits of this bank by preference, and before any dividend can be declared or distributed to shareholders. It is not shown or pretended that the bank has in its possession any funds which it could legally distribute to its shareholders, or which it could pay to them without a manifest violation of its charter. If voluntary payments to or for account of its shareholders would violate its charter, and be a breach of its contract with the State and its bondholders, forced payments would be equally so. The authorities cited by the defendants are inapplicable *246to the present case. Where the capital, assets, and profits of a bank are at the disposal of its shareholders, the State may perhaps compel the bank to pay their taxes on stock. But such legislation with reference to the Citizens’ Bank would be violative of the vested rights of others, and, as we think, unconstitutional.
It is, therefore, ordered that our former decree remain undisturbed.