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Keywords

statutediscrimination

Related Cases

Montana Nat. Bank of Billings v. Yellowstone County, 82 Mont. 380, 267 P. 304 (Mem)

Facts

The case arose from a dispute regarding the taxation of state banks in comparison to national banks. The state Supreme Court had previously held that state banks were to be taxed on their property and shares, excluding the value of U.S. securities. However, the Supreme Court of the United States found that this interpretation led to discrimination against national banks, violating federal law.

In our decision in the case at bar, which was promulgated December 30, 1926 (78 Mont. 62, 252 P. 876), we expressly disapproved the construction given our statutes in East Helena State Bank v. Rogers; but this the Supreme Court of the United States held did not cure the mischief.

Issue

Did the state statutes, as construed by the state Supreme Court, create discrimination against national banks in violation of federal law?

It is clear that the state statutes, as construed by the state Supreme Court in the present case, do not produce the discrimination asserted or any discrimination in favor of the moneyed capital employed by state banks in competition with national banks.

Rule

The assessment of state bank shares must not violate the restrictions on state taxation of national banking associations as outlined in section 5219 of the Revised Statutes of the United States.

It is then held that the assessment as actually made clearly violated the restriction upon the state power of taxation which is contained in section 5219 of the Revised Statutes of the United States ( 12 USCA § 548 ) relating to the taxation of shares of national banking associations.

Analysis

The Supreme Court analyzed the state statutes and their application, determining that the interpretation provided by the state Supreme Court in a previous case led to an invalid assessment of taxes on national banks. The court emphasized that the value of U.S. securities should not be included in the taxation of shares, as this would create an unfair advantage for state banks over national banks.

But in the taxation of shares of state as well as of national banks, the value of these securities, so far as it contributes to the value of the shares, is included, because the shares are the property of the shareholders distinct from the corporate assets, which are the property of the banks.

Conclusion

The Supreme Court reversed the judgment of the state court and remanded the case for further action in accordance with its mandate, indicating that the state must follow the correct interpretation of its statutes.

Therefore, in conformity with the mandate of the Supreme Court of the United States, the judgment of this court affirming the judgment of the district court of Yellowstone county, promulgated December 30, 1926, is reversed, and the cause is remanded.

Who won?

The Supreme Court of the United States prevailed in this case, as it found that the state court's interpretation of the statutes was incorrect and led to discrimination against national banks.

The Supreme Court held that the taxing officers of this state were required to follow the construction of our statutes given by this court in the Rogers Case until that construction was overturned.

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