1. A state tax upon a national bank, based on its capital stock,
surplus, undivided profits and other property, is not equivalent to
a tax upon the shareholders in respect of their shares, and is
invalid under Rev.Stats. § 5219. P. 258 U. S.
2. When the validity of an assessment by state officers is
challenged here, the court must determine the effect of the thing
actually done; what might have been done under the local statute is
not controlling. P. 258 U. S. 365
123 Miss. 279, 84 So. 707, reversed.
Page 258 U. S. 363
Certiorari to a judgment sustaining a tax on the petitioner.
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Petitioner is a national bank located at Gulfport, Harrison
County, Mississippi. The state revenue agent instructed the tax
collector for that county as follows:
"The following described property in said county, to-wit:
capital stock, surplus, undivided profits, and any and all other
property properly assessable to banks, amounting to $75,150,
belonging to and owned by First National Bank of Gulfport has
escaped taxation during each of the years of 1902, 1903, 1904,
1905, 1906, and 1907, by reason of not being assessed."
"You are, by virtue of the Annotated Code of Mississippi of
1906, Chapter 131, § 4740, now notified and required to, within ten
days hereafter, make the proper assessment of said property by way
of an additional assessment, on the roll or tax list in your hands,
and to give ten days' notice in writing to said First National
Bank, whose property is so assessed, and also notify in writing the
board of supervisors of said county of said assessment."
In obedience to this instruction, the collector entered upon the
rolls of his office an assessment to the bank in these words:
"Amount of all other personal property not otherwise mentioned,
Objection was duly offered upon the ground that the corporation
was assessed, and not the stockholders, as required by § 5219,
Revised Statutes of the United States. The Harrison County Circuit
Court overruled this and directed the board of supervisors:
Page 258 U. S. 364
"to assess the First National Bank of Gulfport, Mississippi,
with capital stock, surplus, undivided profits, and any and all
property assessable to said bank, in the sum of $75,150, for the
years 1903, 1906, and 1907, which said property was at said time
owned by said First National Bank, and which had escaped taxation
for each of the years as hereinbefore set out, and said board of
supervisors is hereby directed to make such assessment by way of
additional assessment on the roll and tax list of Harrison County,
The supreme court of the state approved this judgment. See
State Revenue Agent v. Bank,
108 Miss. 346; Adams v. First
National Bank of Gulfport,
116 Miss. 450; First National
Bank of Gulfport v. Adams,
123 Miss. 279.
Section 5219 *
(copied below), prescribes the full measure of the power of the
several states to impose taxes upon national banking associations
or their stockholders. Any assessment not in conformity therewith
is unauthorized and invalid. Bank of California v.
Richardson, 248 U. S. 476
248 U. S.
"The tax assessed to shareholders may be required by law to be
paid in the first instance by the corporations themselves as
Page 258 U. S. 365
debt and in behalf of the shareholder, leaving to the
corporation the right to reimbursement for the tax paid from their
shareholders, either under some express statutory authority for
their recovery or under the general principle of law that one who
pays the debt of another at his request can recover the amount from
Home Savings Bank v. Des Moines, 205 U.
, 205 U. S.
But, as pointed out in Owensboro National Bank v.
Owensboro, 173 U. S. 664
173 U. S.
-677, a tax levied upon a corporation measured by the
value of its shares is not equivalent to one upon the shareholders
in respect of their shares.
Where the validity of an assessment by officers of the state is
properly challenged, and the matter comes here, this Court must
determine the effect of the thing actually done. What might have
been done under the local statute is not controlling. We think it
clear that the assessment in the present case was against the
corporation, and beyond the power of the state definitely delimited
by § 5219.
The judgment of the court below must be reversed, and the cause
remanded for further proceedings not inconsistent with this
MR. JUSTICE CLARKE took no part in the consideration or decision
of this cause.
"Nothing herein shall prevent all the shares in any association
from being included in the valuation of the personal property of
the owner or holder of such shares, in assessing taxes imposed by
authority of the state within which the association is located, but
the legislature of each state may determine and direct the manner
and place of taxing all the shares of national banking association
located within the state, subject only to the two restrictions,
that the taxation shall not be at a greater rate than is assessed
upon other moneyed capital in the hands of individual citizens of
such state, and that the shares of any national banking association
owned by nonresidents of any state shall be taxed in the city or
town where the bank is located, and not elsewhere. Nothing herein
shall be construed to exempt the real property of associations from
either state, county, or municipal taxes to the same extent,
according to its value, as other real property is taxed."