dissenting.
I think that there are matters in the decision in this case that may mislead those whose interests are affected, and may cause difficulty in applying the law in the future.
“Double taxation is common,” but it is always avoided if practicable. Prior td the act of 1911, the farmer who could not make full payment for his farm was compelled to mortgage it. • He still paid taxes on the full value of his farm, although he virtually owned only a part interest therein. His creditor also paid taxes on the mortgage interest, and, of course, he added this tax to the rate of interest he exacted on the loan. This was double taxation on the farmer who paid taxes on the value of the farm, and paid an additional interest equal to the tax on the mortgage. As a mortgage is a conveyance of real estate for a specified purpose and is an interest in real estate, and made a matter of public record the same as an unconditional deed, it was thought that this double taxation might be avoided, and the act of 1911 (Laws 1911, ch. 105), entitled “Ah act to provide for the taxation of mortgages of real property and to prevent double taxation on encumbered property in the state, ’ ’’ was enacted for that purpose. It provides: “The words ‘real property’ ‘real estate,’ ‘and lands,’ shall include all property a conveyance whereof may be recorded by a register of deeds or county clerk under existing laws” (section 1); and that any recorded instrument conveying or retaining an interest in real estate should be regarded as a mortgage. It further provides: “A mortgage on real estate in this state is hereby declared to be an interest in real estate ■ for the purposes of assessment and taxation. The amount and value of any mortgage upon real estate in this- state shall be assessed and taxed to the mortgagee or his assigns, and the taxes levied thereon shall be a lien on the mortgage interest; and the excess in value of the real estate above the mort*60gage or mortgages thereon shall be assessed and taxed to the mortgagor or owner of the premises and be a lien on the owner’s interest.” Section 2. If the land is sold for taxes, “the holder of either the interest of the mortgagor or mortgagee may redeem from such sale the interest sold; and the amount paid in redemption shall be treated and cause the same rights to accrue in favor of the party making the payment as if payment had been made before sale.” Section 2. The proper county officer shall “examine the records of mortgages filed, and make a record in the assessment book against the land covered thereby, of any mortgages and the amount of. such mortgage and the name of the mortgagee, or assignee. The assessor shall at the time the property is assessed, assess the mortgage interest and the value of the real property above the mortgage interest separately. * * * Provided, that the total assessed value of any real property, including the interest of the mortgagor and mortgagee, shall not be changed excepting when all the real property of the county is assessed, unless the value of said property is changed by reason of a change in the improvements thereon. * * * When it is provided and agreed in any mortgage, that the mortgagor shall and will pay the tax levied upon the mortgage, or the debt secured thereby, that such assessor or county clerk shall not enter said mortgage for separate assessment and taxation, but both interests shall be assessed and taxed to the mortgagor or owner of the property mortgaged.” Section 3. “Mortgages on lands in this state filed on and after said date (July 1, 1911) shall not be taxed in any other manner than herein provided.” Section 5.
The suggestion that “an attempt by the state to tax mortgage securities to a national bank, if the federal courts would consider them as personal property, not real estate (as they probably would), would be contrary to the federal law,” is confusing, since *61a mortgage is a deed of real estate executed with all the formalities of any deed, and entitled to record as such. If state laws cannot tax such interests in land as real estate, there must he some principle in the mind of the court that is not made clear.
Section 6343, Rev. St., 1913, 'provided for the assessment of the property of hanks and similar institutions, and chapter 108, Laws 1915, amended that section. The change related only to “interests in real estate less than a fee title.” It did not repeal nor refer to the act of 1911, which provided specifically how such interests should he taxed, and that they “shall not be taxed in any other manner than herein provided. ’ ’ Therefore, it must not be considered to amend or change the former act, nor to make an unconstitutional attempt to do so, if it is capable of a construction either auxiliary to or in harmony with that statute. In construing these two statutes, we are limited to the language of the statutes themselves, and if there are ambiguities we .may consider the record of their enactment. We cannot consider uncertain and possibly interested reports as to what certain members of the legislature then thought the effect and result of their legislation might be. The former act provided specifically (section 3) that' the interest conveyed by the mortgage, and of course the remaining estate, should both be taxed in the county where the land lay, and the tax thereon should be paid there. It is the only statute we have that does provide specifically for assessing and taxing them. The amendment does not attempt to provide for assessing or taxing them. It contains nothing but two negatives — that such interests in real estate “shall not be considered or assessed as part of the capital stock for purposes of taxation, and shall not be deducted from the capital, surplus'or undivided profits.” Laws 1915, ch. 108. This is in entire harmony with the.former act. The tax is paid on these interests in another county, and if the purpose of the entire *62legislation on the subject is to be accomplished to “provide for the taxation of mortgages of real property and to prevent double taxation on encumbered property in the state,’’.they cannot be taxed “as a part of the capital stock,” and should neither be counted as part of the capital stock for taxation nor deducted therefrom. The distinction between taxing real estate to the bank, and taxing it to the stockholders who own the bank and all of its assets, is confusing, especially in connection with the theory that, “in the absence of laws, state or federal, forbidding it, there is no reason in the law why the entire capital stock óf the corporation, consisting of its cash, personalty, or realty, may not be taxed to the hank, in addition to a tax on the shares to the owner.” Almost anything can be done “in the absence of laws” forbidding it. But our Constitution requires that “every person and corporation shall pay a tax in proportion to the value of his, her or its property and franchises.” Const., art. IX, sec. 1. And the statutes we are construing forbid the taxation of such interests in land “in any other manner” than those statutes provide. The general provision of section 6343, Rev. St. 1913, as amended by the act of 1915, that the capital stock shall be listed by the assessor as assessed by him, and returns made as other returns are made, and the language of the exception expressed in the proviso added to the section that interests in real estate less than a fee title shall not be “assessed as part of the capital stock,” nor deducted therefrom, are construed as requiring that such interest shall be assessed as a part of the capital stock. The reason suggested is that “assessors heretofore, in assessing shares, have considered, all the assets of the bank, ‘including all property and assets of every description.’ * * * How else could he do it under the Constitution and his oath to assess at the true value? If among the assets was included real estate to be assessed separately, he considered it as part of the shares of stock and deducted it *63from the total valuation. If not included, then how could it he deducted?” This language seems to need explanation. To assess is to fix. the valuation for taxation, 'Ihe valuation returned by the assessor for taxation does not include the value of the real estate separately assessed, whether it is first included in the value of the shares and then taken out to find the value assessed, or is not included in the value of the shares and therefore not deducted. In neither case is real estate, which is assessed separately, assessed in the shares of stock.
It is also said: ‘ ‘ Shares of stock represent a liability of the bank. The words ‘capital stock’ in the statute mean shares of stock which are the unit of taxation. The context shows it, and such must have been the meaning, .because, under the federal law, a tax on what is technically capital stock is not permitted.” It is not made clear why real estate values must he assessed in shares of stock when “under the federal law, a tax on what is technically capital stock is not permitted.” When this statute requires that such property shall not be assessed as part of the capital stock, “the words ‘capital stock’ in the statute mean shares of stock,” and are not used technically.by the legislature. But what is the difference between “capital stock” and “shares of stock,” either commonly or technically? Heretofore generally it has been considered that there may he for some purposes a difference between the capital of a hank and the stock or shares representing the property and assets of the banking corporation, but that “bank stock,” “bank shares,” shares of stock,” “capital stock,” “shares of capital stock,” and other similar expressions have the same 'meaning commonly and technically. That is, there may he for some purposes a technical difference between capital and stock, hut stock is stock for all purposes. The statute says that such interest in real estate “shall not be considered or assessed ás part of the capital stock for purposes of taxation,” Laws 1915, ch. 108. Is the *64word “not” in the statute canceled? Why is it that the supposed technical difference between “capital stock” and “shares of stock” requires that the word “not” shall be disregarded?
What is the difference to the shareholders whether any particular piece of property is taxed to the bank, or in the shares of stock? I suppose it is still true that the shares of stock represent all of the assets, real and personal, of the bank, and the shareholders own the bank and all of its property, so that, if any article of property is injured or taxed, the loss falls upon the shareholders. If property then is taxed to the bank, and its value is also included in the shares that are assessed to the stockholders, they suffer taxation twice on the same valuation. This property is assessed in the county where the land lies. If the banking business is in a distant county, the assessor must still assess the shares of stock and now must include this property in its valuation.
I am afraid that it'is not made clear which assessor has jurisdiction. They might both assess the mortgage interest, but, of course, this is not intended, as that would be triple . taxation. There are two distinct methods of assessing banks. If banks or shares of banks are assessed upon their tangible property only, and their franchise to do business given them by the state is not included, some courts have intimated that if we tax their shares of stock which include all property and also tax real estate to the bank, if the value so doubly taxed is not too great, the bank will after all not be paying to the state more than a reasonable tax on the real value of the franchise and the value of the property of the bank. Some of the states tax upon that theory, and the federal statute allows them to so tax national banks, if they tax their state banks in that way. This is all that there is to the federal statute upon the subject of taxing shares of national banks by states. Our state has adopted and con*65tinually practiced a more equitable plan. Tbe franchise must be valued by the assessor in valuing- the shares for assessment. The banks are required to furnish information for that purpose. They must return the amount of capital, the dividends received thereon, reserve, etc., from which the assessor must find the value of the right to do a banking business and the protection of such business by the state. There is no occasion in our state to resort to double taxation or any subterfuge to get even on that score. It is not necessary “to say that any of the property of the bank shall not be ‘considered at all.’ ” But it is fair to say that any interest in real estate shall be taxed in the county where the land is, and that such interest shall not be included in or deducted from the shares of stock, which include the franchise and all tangible property represented by and included in such shares.
It might be desirable to explain whether it is intended to revert to the old practice before the statute of 1911 was enacted to “prevent double taxation on encumbered property in the state.” It is said that we are committed to the rule that, when “mortgages were taxed to the bank as real estate in another county, * * * the deduction must be made.” But, if the mortgagor has agreed to pay the tax on the mortgage interest, it must also be taxed to the shareholders. In. that case the money loaner would add the tax to the interest charges and in that way the borrower would pay it twice. He would gain nothing by agreeing to pay the tax, and of course would not make such agreement. Would this bring us back to the old way of double taxation of the debtor, or would it merely prevent borrowing from banks and similar institutions,' and yet enable the debtor to obtain his money to finish paying for his farm from private parties who will be more favorably situated to make such loans?
The majority opinion says that in First Trust Co. v. Lancaster County, 93 Neb. 792, 795, “we held that, *66mortgage securities being declared real estate, the assessor, in arriving, at the true value of the shares of stock, should deduct from the total valuation of the (shares of) capital stock the amount of such securities held by the bank.” And, in the recent case cited, City Trust Co. v. Douglas County, 101 Neb. 792, it is held that the mortgage interest is real estate if the. mortgagee is to pay the tax thereon, and, being then real estate, it must not be taxed as a part of the shares. And this present decision requires the assessor to deduct mortgages of real estate in assessing shares of stock if the bank is to pay the tax thereon. This, I suppose, is because such mortgage interests are real estate; there could be no other reason. Is it really intended to decide that a conditional deed will convey real estate if one party is to pay the tax upon the property conveyed, but if the other party is to pay the tax then the property conveyed is not real estate?
We all understand that, “in assessing shares of stock for taxation, everything that enters into value must be included, unless it has been separately assessed.” But if the interest in land conveyed by a mortgage is real estate when the tax thereon is paid by one of the parties to such conveyance as well as when it is paid by the other party, then the interest we are considering is real estate. This, we have now three times decided. And, if the assessor shall “assess the mortgage interest and the value of the real property above the mortgage interest separately,” where the land is, though in a far distant county, and cannot assess it in any other manner, is it separately assessed? What is meant by the statement that, “In so deciding, we say nothing as to how mortgage securities should be assessed for taxation?” when it is also said, “It is the shares of stock which are being assessed?” Is the share of stock something distinct from value? We have heretofore supposed that it was the value of the share that was being assessed. If the value of real estate is *67included in the assets of the bank, as shown upon its books, then the total value of the shares is not assessed at all, but the value of such real estate which has already been assessed is deducted from the book value of the assets, and it is the remaining value of the shares that is assessed. To comply with the statute, real estate securities must be kept in an account by themselves, and must not be mingled with general assets, and therefore are not included in nor deducted from the general assets for taxation.
A new principle is introduced into our law by the decision that “the corporation’s right to resist taxation upon its mortgage securities, contrary to the mortgage tax statute, if it were attempted, is .one thing; the right of an individual shareholder to resist taxation on his shares of stock, according to true value, is an altogether different thing.” Does the shareholder not own the “mortgage securities?” Does he own the banking house? Does he own anything but a piece of paper? The fiction that the shares of stock can be assessed at their full value, which included all property of the corporation of whatever nature, and certain specified articles of property may also be assessed again to the bank, has not been allowed in any jurisdiction except when the value of the franchise or other valuable rights have not been supposed to be included in the general value of the property and assets. .This has in some places been used as a subterfuge to get even with the banks. Heretofore our state has never resorted to such practice. The assessor, regarding the reserve, etc., and especially the net earnings and the dividends, can make a fair estimate of the value of the franchise, etc., and must include such value as value to be assessed. The value of the franchise is not deducted from the book value of the assets, but other property separately assessed is either not included in the book value of assets, or, if it is mingled with the value of the assets generally, it is deducted before assessing the *68shares, and it is only the remaining value that is assessed.
Why say, “In legal contemplation, it is the shareholder, and not the bank, which is being taxed,” when we know that all taxes, whether nominally assessed against the shares or against the’bank, must be borne by -the shareholders ?
Deciding that “we leave banks and individuals, as holders of mortgage securities, upon the same footing,” means, I suppose, either that individuals who hold mortgage interests in lands must pay taxes thereon, although the mortgagor pays taxes on the entire value of the land, or else it means that the statute which requires that such interests must be assessed in a distant county where the land is, and so pay local as well as general taxes, and that such interests “shall not be taxed in any other manner,” is void as to banks. But, if the latter, how will it be with individuals? Will they be taxed on such securities in the county where they reside, or in a distant county where the land is? This last question is important, as it will be a hardship to require one who is not a resident of a city to pay city taxes, if banks are not so required.
So far as I can see, this decision as a whole introduces abstract theories of economy and taxation into our statutes in such a way as to create great confusion, and I cannot concur.