Board of Equalization v. First State Bank , 77 Okla. 291 ( 1920 )

I concur in the conclusion announced by the majority of the court, but am unable to concur in the reasons given in arriving at that conclusion. On account of the importance of the questions involved, I deem it advisable to set out the grounds for my dissent in a separate opinion.

The only controversy, as I view the facts presented in the lower court, was the sole question as to the taxability or nontaxability of the guaranty fund warrants held by the bank.

The record discloses that on the 18th day of May, 1918, the First State Bank of Oklahoma City filed with the county assessor of Oklahoma county its assessment list for the purpose of taxation for the year 1918, showing its capital stock consisted of 610 shares of the par value of $100 each, or a capital stock of $61,000; that its surplus was $6,100 and its undivided profits, $6, making a total of $67,106, capital, surplus, and undivided profits. Said list further contained the names of the shareholders of said bank, together with their post-office addresses, the number of shares held by each, and the value of said shares of stock. On the reverse side of the assessment sheet was the following notation:

"Public Building Bonds, Series 24, No. 1 to 10, inclusive, $1,000 each.

"Banking Board Warrants, No. 3265, $10,000."

The bank appeared before the county assessor and claimed exemption from taxation to the extent of $20,000, this claim being based upon the ground that the bank had invested its capital stock and surplus in public building bonds to the extent of $10,000, and in guaranty fund warrants to the extent of $10,000. The county assessor allowed the exemption of $10,000, being the amount invested in public building bonds, but refused to allow any exemption by reason of the investment in guaranty fund warrants. The bank appeared before the county board of equalization and filed its complaint with said board, wherein it complained of the action of the county assessor in disallowing its claim by reason of its investment in guaranty fund warrants in the sum of $10,000. The county board of equalization heard evidence in support of the bank's claim for exemption by reason of its investment of its capital and surplus in public building bonds and guaranty fund warrants. The county board of equalization, the bank gave notice the bank in so far as the investment of the $10,000 of the bank's capital and surplus in building bonds was concerned, but disallowed the claim in so far as the investment of the $10,000 of the bank's capital and surplus in guaranty fund warrants was concerned. From this order of the county board of Equalization, the bank gave notice of appeal, and in due time lodged said appeal by filing a transcript of the proceedings of said board with the court clerk of Oklahoma county. Thereafter said matter came regularly on for hearing upon the transcript filed by the bank in the district court of Oklahoma county. The trial court found that, as a matter of law, the bank was entitled to have the sum of $10,000 of its capital invested in guaranty fund warrants, as well as the sum of $10,000 of its capital invested in public building bonds, deducted and not considered in the assessment levied for taxation against the bank. The board of equalization has appealed to this court. It is conceded by the appellant that both the act of the Legislature and the bonds reciting the debt specifically exempted the bonds from taxation, and so long as the bonds were held by individual citizens of the state, or the bank itself, they would not be subject to taxation.

Was the assessment herein an assessment on the bank and on its moneyed capital, or was it one against the shares of stock? While section 7318, Rev. Laws 1910, as amended by Sess. Laws 1915, p. 143, provides that banks shall be assessed and taxed on the value of their shares of stock therein, I am forced to the conclusion that in making this assessment the same was not on the shares of stock, but was on the capital stock, surplus and undivided profits. It is true that we find under schedule A of said list the name, address, and number of shares of each stockholder, together with the value of the shares, which appears to be $77 per share, or the total value of the 610 shares being $47,106, being the exact amount reached by deducting the $20,000 from the capital stock, surplus, and undivided profits. It appears that no change was at any time made by the board of equalization in the value of the shares as returned; therefore I am forced to the conclusion that the shares of stock have not been assessed, but clearly the assessment was against the bank and on the capital stock, surplus, and undivided profits. This conclusion is supported by the grounds stated in the motion for a new trial — first, that the court erred in holding that the capital stock invested in guaranty fund warrants was nontaxable; second, that the court erred in holding that there should be deducted from the assessment of the bank the sum of $10,000, being the amount it had invested in guaranty fund warrants. While one of the grounds in said motion complains of the action of the court in not holding that the shares of stock of the bank were assessable in the hands of the owners and holders thereof, and that all the assets of the bank should be taken into consideration in fixing the assessable value of the shares, I have searched the entire record and fail to find wherein at any time before or during the proceedings in the trial court, any contention was made by appellant as set forth in the last assignment. The sole and only issue before the assessor, the county board of equalization, and the district court was whether or not the bank was entitled to have $10,000 of its capital invested in guaranty fund warrants exempted from taxation; in other words, whether or not guaranty fund warrants were exempt from taxation. No other issue than this was ever mentioned or considered. This view is fully sustained by the action of the assessor and the county board of equalization, in that no question was there raised as to the right of the bank to have a deduction on account of the $10,000 invested in building bonds.

I am unable to comprehend how this court can hold that banks should be assessed and taxed on the value of their shares of stock, and from that valuation no deduction should be made for the amount of capital invested in public building bonds and guaranty fund warrants, when that question was not before the trial court, was not passed upon by the trial court, and was raised for the first time in this court.

The decisions are uniform, as well as numerous, in holding that a party bringing his action is required to form his pleadngs in accord with some definite and certain theory, and the relief to which he claims to be entitled must be in accord therewith; and, on appeal, he is bound by the position and the theory assumed and on which the case was heard in the trial court, and one who has tried his case in the trial court upon one theory and lost will not be permitted on appeal to the Supreme Court to change front and try to prevail upon a different theory. Turley v. Feebeck, 38 Okla. 257,132 P. 889; Smith v. Colson, 31 Okla. 703, 123 P. 149; Herbert v. Wagg, 27 Okla. 674, 117 P. 209. The facts in the instant case appear to be practically the same as in the case of In re First State Bank of Oklahoma City, 68 Oklahoma, 171 P. 864. In the body of the opinion, page 867, Justice Sharp, speaking for the court, says:

"As to how banks should be assessed and as to the right of such banks, acting either for themselves or for their stockholders, to deductions from the value of their taxable property on account of the corporate ownership of such warrants, we express no opinion, and nothing contained herein shall be construed as decisive of either proposition. These important questions will only be passed upon when properly raised in this court and submitted in conformity to the court rules. That in the instant case the result may be to sustain the trial court's action directing the deduction on account of the ownership of the warrants will not afford grounds for a different conclusion. In such situation, we must for the time indulge the presumption that the trial court correctly decided the law in these respects."

I concur in the conclusion of the majority of the court in holding that the tax in the instant case should be assessed against the bank on the amount of $47,106, being convinced from the record in the case that the tax was levied in the first instance against the capital stock, surplus, and undivided profits, and that the bank was as much entitled, to have the $10,000 invested in guaranty fund warrants deducted as it was to have the $10,000 invested in public building bonds deducted, and I reserve the right to announce my interpretation of the law upon the question of whether or not the capital of a bank invested in nontaxable warrants should be deducted from the value of the shares of stock in assessing the latter for taxation when properly raised in this court, and submitted in conformity with the uniform rulings of this court.