Rockingham Ten Cent Savings Bank v. Portsmouth

Sargent, J.

The case finds that the plaintiffs are a savings bank, duly incorporated, at Portsmouth, in 1867, having the right by their charter to receive and hold buildings and real estate, such as shall be necessary and convenient for managing their affairs, not exceeding in value, at the time the same is purchased or accepted, the sum of $10,000. In 1869 the bank purchased real estate, at a cost of $6,550, from the *25deposits and accumulations of said bank, and the purchase was deemed by the trustees as a legal, prudent, and economical investment of their funds. The bank soon began to make improvements upon said land, which have been continued until the real estate is now worth $16,399.88 ; but nearly all of said improvements have been made since the tax in question was assessed.

In 187 0 the city assessed a tax upon this real estate, which is all located in Portsmouth, of $122, the estate being valued in the inventory at $5,000. We do not understand that any complaint is made that there was any over-valuation of this estate in the inventory, as compared with the valuation of other real estate in Portsmouth. No objection is made to the legality of the assessment, provided the real estate is liable to be taxed in Portsmouth.

The plaintiffs have complied with the requirements of the law, as contained in secs. 1 and 2 of ch. 4 of the laws of 1869, which provide that the treasurers of savings banks shall, on or before the first day of May, transmit to the State treasurer a statement, under oath, of the amount of all deposits and accumulations in their respective savings banks on the first day of April next preceding, with the names of the towns where the depositors reside, and the aggregate of deposits in such towns, and of the amount of the deposits and accumulations by persons not resident in this State; and that each bank shall pay to the State treasurer, on or before the 15th day of June, one per cent, on the whole amount of such deposits and accumulations — and claim the benefit of the remaining provision of the same statute, to wit, that “ no other tax shall he assessed on said deposits and accumulations, or against its depositors, on account thereof.”

This bank, having paid this one per cent, on the whole amount of their deposits and accumulations, claim that they cannot be taxed for their real estate which has been purchased with a portion of their deposits and accumulations. In considering this question, it is not material to inquire whether all this real estate is necessary and convenient for the bank. The court find in this case that all of this real estate is convenient for the bank, but that it is not all necessary for the management of the affairs of the bank. But we think that is a question which the city of Portsmouth are not called on to decide before they can assess their tax.

If the trustees of the bank have gone beyond their chartered rights in that respect, the State may perhaps Inquire concerning it: or, if they are misapplying the deposits in the bank, the depositors may take measures to rectify that error: but that is a matter about which the selectmen or assessors of towns or cities can be presumed to know nothing, and concerning which the law does not require them to inquire or to decide. If the real estate of a savings bank is liable to taxation at all, then it would all be liable to be valued as other real estate in the same town, whether the same were necessary and convenient, or only convenient; nor would the selectmen be limited to the amount which the bank by their charter were authorized to hold, *26because the assessors could not be presumed to know anything about such provisions; and if they did, it would make no difference, for the bank could not claim exemption from taxation on any property they might own if otherwise liable, by asserting that they had violated their charter in purchasing it. So, then, whether the estate be worth $6,000 or $16,000 is entirely immaterial; or whether the same is necessary and convenient or only convenient, or not even that, would not concern the assessors, and is not material to this inquiry.

In Savings Bank v. Nashua, 46 N. H. 389, which was decided in 1866, but which case arose upon a tax assessed in 1864, it was held that real estate belonging to a savings bank is taxable to the bank in the town or place where the real estate is situated ; but the majority of the court held that if a savings bank own stock in another corporation, the bank is not taxable for such stock in the town or place where the bank is situated; and this upon the ground that it would be a double taxation, because the depositors were taxed for the whole amount of their deposits, and these deposits having been paid out for and invested in this stock, it would be paying a double tax on the deposits to tax them first to the depositors and again to the bank; and upon the ground (see p. 398) that “ it is a fundamental principle in taxation, that the same property shall not be subject to a double tax, payable by the same party, either directly or indirectly; — and where it is once decided that any kind or class of property is liable to be taxed under one provision of the statutes, it has been held to follow, as a legal conclusion, that the legislature could not have intended the same property should be subject to another tax, though there may be general errors in the law which would seem to imply that it was to be taxed a second time.”

And on page 399, Perley, C. J., in delivering the opinion of the majority of the court, says, — “ I have no doubt that this provision of the statute” (Rev. Stats., ch. 42, sec. 1), “ to avoid the injustice of double taxation, was intended to reach all cases where, by the general law, the property of corporations is taxed to the beneficial owners in the towns where they reside, and a part of the property, like land, is taxable to the corporation, and that, on proper application, it would have been the duty of the assessors in the present case to deduct the value of the land taxed to the corporation from the aggregate value of the deposits taxed to the depositors.”

Upon examination of both the opinions delivered in that case, I find no reference made to a provision in the law of 1853 upon the subject of double taxation, though Bellows, J., refers to another provision of the same law, on page 407 of his opinion. The provision to which I refer is the proviso in sec. 2 of ch. 1419 of the laws of 1853, and is as follows: “Provided, that neither this act nor the laws of this State shall be so construed as to cause any corporate stocks or other property to be twice taxed.” Whether this applies to other corporate property, or to other property generally, makes no difference in this case. Land is property, and, in case of savings banks, the real estate owned *27by the bank is corporate property, and is within the terms of this proviso.

This provision is substantially reenacted in Gen. Stats., ch. 49, sec. 7; for though in the General Statutes it is provided that “no statute provision shall be so construed as to subject any stock to double taxation,” yet it appears from the report of the commissioners, who revised the statutes, that they did not intend to change the law of 1853, but that the only change they intended to make was one merely verbal, without any alteration of the sense (see Report of Commissioners, ch. 50, sec. 7).

But supposing the General Statutes be construed to apply simply to stock in a corporation, we see no reason why deposits in a savings bank should not be considered as stock, so far, at least, as that, if it has once been taxed to the bank as stock or deposits, it should not be again taxed as real estate; for Perley, C. J., in the opinion of the court (page 399), says, — “ the depositors of savings banks are the beneficial owners of all the property held for them in a corporate trust by the banks. They own the whole property and capital in shares proportioned to the amount of their respective deposits, as much as the shareholders or stockholders in any other corporation” — showing that he considered the deposits in savings banks to be stock in a corporation in fact, though it may not be in name, just as much as shares in any other bank. We can, in fact, see no real distinction that would be material to the inquiry in this case.

But this is not all. The law, since the decision in Savings Bank v. Nashua, has been radically changed. Then, the deposits above a certain amount were to be taxed to the depositors, the same as bank stock was to be taxed to the owners of such stock; but now, by Gen. Stats., ch. 58, sec. 13, as amended by ch. 4, sec. 2 of the act of 1869, it is provided that “ every savings bank shall pay annually, on or before the 15th day of June, to the State treasurer, a tax of one per cent, on the whole amount so returned as aforesaid to the State treasurer; and no other tax shall be assessed on said deposits and accumulations, or against its depositors on account thereof.”

This does not stand upon the same ground as the half of one per cent, which banks are to pay to the State for a literary fund. “ This is not named or assessed as a tax * * * and has more the character of a bonus, voluntarily paid for the right to exercise the privilege of banking, than an ordinary tax.” Perley, C. J., p. 399.

But in case of savings banks, the one per cent, is named and specified as a tax, to be assessed upon the bank; and it is specially provided that “ no other tax shall be assessed upon the same property to the bank or to the depositors.” This is explicit and certain. The case finds that the treasurer had made his return of all the deposits and accumulations in the bank on the first day of April, 1870, including the amount paid for this real estate, and had paid his one per cent, on the whole amount to the State, and that the State had paid back to the *28city of Portsmouth the full amount due to her, according to the provisions of the statute.

In the case of banks of circulation, the fraction of one per cent, is paid to the State, not as a tax, but as a royalty or bonus, for the privilege of doing banking business in the State, and to constitute a fund to be applied to the benefit of education; and all the stock is then taxed to the owners thereof, like other property. In the other case, the one per cent, is assessed specifically as a tax, and, when paid to the State, is to be distributed to the several towns where the depositors reside, in proportion to the amount of deposits owned in such town, much after the manner of assessing our railroad taxes, and having them all paid to the State, and then contributed to the towns in which the railroad stock is owned.

So, in this case, the tax is assessed as a tax, is paid to the State, and then distributed to the towns where the stock or deposits are owned. In the case of railroads, all their real estate, such as road bed and depots, and such as is necessary for the running and operating the road, is taxed to the road, and is not taxed as real estate in the towns where it is located ; and by the same rule such real estate as is necessary for managing the business of the bank, and which lias been purchased with the deposits and accumulations of the bank, may be taxed to the bank; and having paid in that way one tax, the statute is peremptory that no other tax shall be assessed upon the same property. The special provision in regard to savings banks forbids it, and the general provision “ that no statute shall be so construed as to subject any stock to double taxation, is, as we have seen, broad enough to cover the same ground.

We do not overlook the general provision of the statute, that “real estate shall be taxed in the town where situate, to the person claiming the same. Gen. Stats., ch. 50, sec. 11. Nor do we doubt the propriety of adhering to that rule as a great leading and governing principle in legislation. But in this case the legislature has provided explicitly that the treasurers of savings banks shall annually, on, &c., “ transmit to the State treasurer a statement, under oath, of the amount of all deposits and accumulations in their respective banks on the first day of April next preceding; ” and that every savings bank shall pay annually, on, &c., to the State treasurer “ a tax of one per cent, on the whole amount so returned 'as aforesaid to the State treasurer; and no other tax shall be assessed on said deposits and accumulations, or against its depositors, on account thereof.”

The treasurer is to return the amount of all deposits and accumulations of every kind — no matter how invested, whether in real estate or otherwise, all is to be returned — and the tax of one per cent, is to be paid upon the whole amount so returned ; and no other tax is to be assessed on said deposits or accumulations, or against its depositors, on account thereof. This last provision is in accordance with the “fundamental principle in taxation, that the same property shall not be subject to a double tax, payable by the same party, either directly or *29indirectly; ” and when it is once decided that any kind or class of property is liable to be taxed under one provision of the statute, it follows, as a legal conclusion, that the legislature could not have intended that the same property should be subject to another tax. 46 N. H. 398.

When we apply these principles to the statute before us, we can have no doubt that the legislature intended that the tax of one per cent, should be in full for all taxes upon the same property, in whatever form it might exist, and that they intended to make this case an exception to the general rule of taxing real estate in the town where situated, as they had long ago made a similar exception in case of railroads. They might as well have provided that the real estate of the bank should be taxed where located, and that this amount should be deducted from the whole amount of deposits and accumulations, and the tax of one per cent, should be assessed upon the residue; but they have made no such provision in this case. *

We think this tax, upon the facts found by the court, was not properly assessed upon tliig real estate in Portsmouth. It does not appear whether all these facts were made known to the assessors when this tax was assessed, nor is that material. Should it now be made to appear that this whole real estate was taxed as deposits and accumulations of the bank, as the court has found the fact to be, and that said tax has been fully paid, it should not again be taxed, either to the bank or to the depositors; and if said property has been thus improperly-taxed a second time, it would constitute a sufficient cause for abating such tax, upon a proper application for that purpose.

We see no ground upon which this bill can be sustained as a bill in equity, because the parties have a plain and adequate remedy at law, upon an application for the abatement of this tax. Ordinarily the bill would be dismissed at once for that reason, but, upon examining the bill, one of the prayers which it makes, among others, is, that this tax may be abated. We see no reason why we may not properly, therefore, disregard the other prayers in the bill, and consider it simply as an application for the abatement of the tax, upon the grounds stated in the bill, namely, that it was illegally assessed.

It was held in Massachusetts, in Osborn v. Danvers, 6 Pick. 98, under their statute, which only authorized an abatement of taxes when there had been an over-valuation and assessment, that the plaintiff, who had paid his tax pursuant to a warrant to the collector, could not bring assumpsit to recover back such part as was assessed upon the overvaluation, but must resort to his remedy under the statute, by a petition to the assessors for an abatement. The same doctrine is held in Boston Water-Power Co. v. Boston, 9 Met. 199, and in Howe v. Boston, 7 Cush. 273;—and in Brewer v. Springfield, 97 Mass. 152, it was held, in case of an illegal assessment, where an application for abatement would not *30lie under their statute, that the court had not jurisdiction in equity to enjoin the city or its collector against collecting the tax, because there was an adequate and complete remedy at law; that, until the plaintiffs had been compelled to pay the tax thus illegally assessed, they had suffered no wrong, and that when they had paid it they could recover it back in an action at law, and that there was no occasion to resort to equity.

But our statute in relation to the abatement of taxes is much broader than that of Massachusetts, above referred to. It is not confined to cases of over-valuation, but applies alike to cases where the whole assessment is illegal, and is as follows: “ Selectmen, for good cause shown, may abate any tax assessed by them or their predecessors.” Gen. Stats., chap. 5B, sec. 10. And sec. 11 also provides, that if they (the assessors) “ neglect or refuse so to abate any person aggrieved, having complied with the requirements of sec. 4 of chap. 52” (meaning chap. 51—see Commissioner’s Report), “ within nine months after notice of such tax, and not afterward, may apply by petition to the supreme court in the county, at a trial term, who shall make such order therein as justice requires.”

There can, therefore, under our statute, be no occasion for a bill in equity in such a case as this. The statute remedy is ample and perfect, and applies to all cases ; and if it should be held that the statute remedy is not the sole remedy that can be used in such cases, yet, upon the authority of Brewer v. Springfield, 97 Mass., before cited, an action in assumpsit at common law, or an action of trespass for taking the distress, where distress is made, would be entirely adequate in case the tax had been collected where the assessment is held to be, as in this case, unwarranted and illegal. And, in fact, in this case no action of law could be maintained, as the tax had not been collected by distress or otherwise.

The only remedy here is the application for abatement, and this bill may be treated as such application, made to the court, which may perhaps be maintained (if not in its present form, at least by means of an amendment), provided it is found that the provision of section 11 of our statute has .been complied with. There is nothing before us from which that fact can be established. This case may be discharged, and that fact found at the trial term where this petition is pending. The main question which the parties desire to have settled here, we presume, is as to the liability of the bank originally to pay this tax ; and, that being settled, the other questions can be disposed of at the trial term ; — and if it shall be found that the application was not seasonably made to the selectmen, then the question whether the plaintiff may have leave to apply after the expiration of the nine months from the notice of the tax for any special reason — such as accident, mistake, or misfortune, or the like, if there is any room for such a question under our statute — can be settled when it arises.

Case discharged.