First National Bank of Louisville v. Louisville
174 U.S. 438 (1899)

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U.S. Supreme Court

First National Bank of Louisville v. Louisville, 174 U.S. 438 (1899)

First National Bank of Louisville v. Louisville

Nos. 634-635

Argued February 28, March 2, 1899

Decided May 15, 1899

174 U.S. 438

APPEALS FROM THE CIRCUIT COURT OF THE

UNITED STATES FOR THE DISTRICT OF KENTUCKY

Syllabus

The decision of the court below that taxes imposed upon the franchise or intangible property of a national bank may be regarded as the equivalent of a tax on the shares of stock in the names of the shareholders, and hence did not violate the act of Congress in that respect, was erroneous and is reversed.

The case is stated in the opinion.

MR. JUSTICE WHITE delivered the opinion of the Court.

In these two cases, the appellant filed its bills to enjoin the assessment and collection of certain taxes. The grounds upon which the prayer for relief in each case was rested were substantially as follows:

First, that the taxes in question were levied upon the franchise and property of the bank, and not upon the shares of stock in the names of the shareholders, and were therefore illegal; second, that the taxes were discriminatory because, as a consequence of the exemption of certain state banks from taxation by special contract, the property of the bank was taxed at a higher rate than other moneyed capital, in violation of the act of congress; and, third, that the taxes were illegal because not in conformity to the state constitution and certain provisions of the state laws.

The court below decided that although the taxes were imposed

Page 174 U. S. 439

or contemplated to be assessed on the franchise or intangible property of the bank, nevertheless they were the equivalent of a tax on the shares of stock in the names of the shareholders, and hence did not violate the act of Congress. It moreover held that the remaining grounds were without merit. 88 F. 409.

The law under which the taxes in question were levied is the same one which was considered in Owensboro National Bank v. Owensboro,173 U. S. 664. The theory of equivalency upon which the court below decreed the taxes to legal was in that case fully examined and held to be unsound.

It follows that the decrees below rendered in these cases were erroneous. It is therefore ordered that said decrees be

Reversed, and the cases be remanded to the lower court, with directions for such further proceedings as may be in conformity with this opinion.

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