FIRST . NA'l\ , BANI{ V. CITY OF RICHMOND.
809
and set off against the judgment entered "against thepetitioneJ.'as garnishee. After the intervening petition was filed, the St. Louis Company effected a compromise with its creditors, and the suit against it in the federal court at St. Louis was dismissed, and its property was restored to its possession. The judgment against the ChicagoCompany, as .garnishee, was for money due for pig-iron bought from the St. Louis Company, and the claim of the former company is for unliquidated damages growing out of the failure of the latter company to receive rails under the contract of December, 1883, a contract having no connection with the one upon which the Chicago Company was garnished. When the latter company was served as garnishee, no part of the claim now urged as a set-off had accrued. The Chicago Company, then, had no right of action for the recovery of that claim, or any part of it. Indeed, it was then uncertain whether that company would make or lose money by the further performance of the rail contract. Without ruling upon other questions discussed by counsel it is sufficient to say that the claim for unliquidated damages growing out of the failure of the St. Louis Company to receive rails under the rail contract, after the failure of that company, and after the commencement of the suit in attachment, and the service of the writ of garnishment upon the Chicago Company, was properly rejected by the court in the trial of the action at law, and cannot now be set off against the judgment rendered against the garnishee. The intervening petition is dismissed without prejudice to the right of the Chicago Company to prosecu te an action against the -81. Louis Company.
FIRsl' NAT. BANK OF RICHMOND
V.
CITY OF RrcmwxD et al. July 15, 1889.)
(Circuit Oourt, E. TAXATION-NATIONAl> BANKS.
n.
Virginia.
Rev. St. U. S. § 5219, providing that shares of national bank stock may be taxed as part of the personalty of the owner, and that each state may tax them in its own manner. except that the taxation shall not be at a greater rate than is imposed on other "moneyed capital" owned by citizens of the state, and that the shares of non-residents shall only be taxed in the city wherein the bank is located, do not authorize the taxation of the stock of a bank in solido by the city in which it does business, but only the shares of individual owners residing in the city are taxable. and they must be taxed separately, in order that the owner may deduct from. their value the amount of his personal indebtedness, where the stale laws or municipal ordinances permit such deductions, and require equality of taxation.
In Equity. Bill for injunction. Johnston, Bmdware &- Williams, for complainant. C. V. Mer'edith, City Atty., for defendants. HUGI-IES, J. :.Tlle questignin this case is upon the amount of a tax asse'lsed by the city of Richmon,d lIpon a national bapk, and upon the manner of assessing and collecting it. It was competent for congress to
310
; FEDERA.'L REPORTER,vol.
39.
have prohibited any taxationb( the national banks by states, cities t counties, or towns. Indeed; on general principles of public polley, the mereililence of congress on the subject, in its legislation respecting the national banks, would have been a prohibition of such taxation. But congress was not entirely silent, and provided, in section 5219 of the Revised Statutes of the United States, that nothing in its legislation respecting the 'national banks should be construed to "prevent all the shares in any association from being included in the valuation of the personalproperty 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 associations located within the state, subject only to the two restrictions that the taxation shall not be at It greliter rate than is assessed upon other moneyed capital in the hands of individual citizens of such state, and that the shares of any natiobal banking association owned by non-residents of any state shall be taxed in the oity or town where the bank is lo.cated, and not elsewhere." A clause is added, authorizing real estate of national banks to be taxed by,the states at the same rate as other real estatA. Authority is here given: to tax the shares of national banks as part of the taxable estntes orthe owners of the shares; and, in laying this tax, the state is prohibited from assessing it at a greater rate than is assessed upon other moneyed capital, in the hands of individual citizens. It is plaJn' that the tax authorized by congress is a several tax upon the shares of each individual stockholder, as distinguished from a lumping tax, or tax in solido, upon the bank itself. By "moneyed capital" is evidently meant, either money itself, or negotiable securities reauily convertible into money, and having a quotable market value, as distinguished from ordinary property . In substance, therefore,congress declares that national bank shares may be assessed for taxation as the property of the individual owners of them respectively, and that these shares, being themselves moneyed capital, shall not be assessed at a higher rate than is assessed upon othetforms of moneyed capital in the hands of indi.vidual citizens. The of Virginia requires that taxation shall be equal and uniform;· that no species of property shall be taxed higher than any btherspecies of property; and that stocks shall be taxed 'accordipg· to their market value. An ordinance of the city of Richmond provides that anypersont8.xed may deduct from the aggregate value of securities',held by him all bonds, securities,liquidated solvent debts claims,and demand.s due fraq! bim to,others, in computing the tax to be assessed against him. The city of Richmond imposes a tax of one and four-tenths per cent. of their market value upon all shares of stock in any bank or corporation of the city whose capital stock is itself not assessed for taxation. In this condition of the law, the defendant F. W. Cunningham, city 'cdllector of the city of 'Richmond'; presented for payment a tax-bill to the First National Babk of RichtlHmd, the complainant here, made out as follows: · · , , " 1 ." : ,,; ..
V. CITY OF RlCIlMOlS"D.
811
1889.
'
:Mr. II. C. Burnett, Cashier; of the First ,*a,bionaI Bank of the City of Rich, mond, to the City of IUchmond, Dr. . '. For taxes upon shares of stock - $840,000 Less value of real estate 38,320 $801,680 at 1.4-'-$11,223 52
Whereupon the bank exhibited in this its bill of cOil1plaint against the city of Richmond and its collector, praying an injunction against the collection oithe tax. A temporary injunction was granted, and the case is now heard for a final decree, either of perpetuation or dismissal. The bill recites that the capital of the bank is $600,000, (which seems to have produced a surplus fund of $240,000;) that the par value of its shares (6,000 in number) is $100, and their market value $140; that its capital consists in part ofHeal estate, (speci fically taxed,) worth - $ 38,000 134,000 United States bonds, (non-taxable) 64,500 Virginia state bonds, (non-taxable,) 49,000 Uity of Richmond bonds, (non-taxable,) Stock in the Union Bank of Richmond, (whose tax is paid by that 10,500 bank,) Aggregating - $296,000
-all of which property is tax-paid or non-taxable as against the First National Bank. The bill charges that the city imposes, and requires the bank to pay, the tax of one and four-tenths per cent. upon the market value of its shares, without allowance of any deduction for the non-taxable securities and specifically taxed property thus shown to be held by the bank; and charges also that this tax is so assessed that the owners of the shares thus taxed are deprived of the privilege, allowed other moneyed capitalists, of deducting from the amount of securities held. by them, including their shares, respectively, the amount of bonds, securities, liquidated claims, and demands due from them respectively toothers. It complains that, besides this discrimination against its own individual shareholders in favor of other moneyed capitalists, the city unlawfully discriminates against the banks of the city, as corporations, 'in favor of corporations which are taxed on their capital stock, all of which latter are allowed to the amount of exempted securities held by them from the values assessed against them. Thus it is charged that, contrary to national, state, and municipal law, the taxlevied against the complainant, under the present system of taxation enforced by the city of Richmond , discriminates against them.in thre,e particulars, viz.: (1) get the: benefit of relief from taxation upon all nontaxable seC,urities which fortrl p!1rt of their capital, in which relief their shareholders participate; whereas, under the. method of taxation complainecl of, this bank's shareholders are deprived. of such relief as to (2) The tax being as-, nearly hlilf the amount of hs
FEDERAl, REPORTERivol.
sessed against the cashier of the bank, and not agalnst .the shareholders severally, these latter are deprived 6r the privilege accorded by the city to the owners of other moneyed capital, of deducting the amount of the debts they owe, from the value of the bonds and securities which they hold, in estimating the amount on which they are taxable. (3) These discriminations against banks in favor of other corporations, and against shareholders of banks in favor of other moneyed capitalists, violate the provision of the state constitution, requiring taxation to be equal and uniform. It is apparent from an inspection of the tax-ticket and the provisions of law under consideration that the discriminations complained of by the bm must result from an enforcement of the tax. There is no room for doubt of the fact that the city of Richmond, in assessing the tax complained of in the manner described in the bill, does discriminate against shareholders of national banks, in favor of other moneyed capitalists, in all the respects specified, and that this discrimination violates alike a leading provision of section 5219 of the United States Revised Statut!'." a like provision of the tenth article of the Virginia constitution, and a just provision of an ordinance of Richmond conferring a privilege of great importance upon all holders of taxable securities, who themselves owe debts. The fact is too obvious to need illustration; and the only question for this court, as a federal court, is whether the decisions of the supreme court of the United States, .in cases on this subject which have gone before it,have sanctioned or condemned such discriminations. A considerable number of cases involving the construction of section 5219 of the United States Revised Statutes have gone to that court, in which the complaint has been of discriminations against national banks and their shareholders, in favor of owners of other moneyed capital, in the assessment oftaxes by the states. In most of them the court has upheld the tax; in others it has pronounced against it. From the nature of the subject, each case has presented its own special facts, and has differed in these faCts from every other case. Up to this time no case of this class has gone from Virginia, and none, like the one at bar, has presented a charged to be in violation at once of national, state, scheme and municipal law. The stlprerile court has dealt liberally with the tax laws of the states which have been brought under its review. It has held that the shares of national banks Hiay be taxed by the states, though no provision be made in assessing it for deducting from computation the always large amount of United States bonds held by the banks. It has held that the tax upon the.shares of these banks may be assessed upon and collected from the banks themselves. It has held that neither of these Circtm1stances in itself vitiates a tax. Even in cases where it has appeared that th'e system of taxation enforced by a state has operated unequally as b.etween shareholders of national banks and owners of other moneyed capital; the court has :not looked 'upon the system with unfriendly Bcrutin:y and illiberal spirit; btitin cases where the discrimination was trivial or or such as must always result from the greater or less imperfection of all human legislation, it has declined to
FIRST. NAT. BANK fl. CITY OF RIGHMOND.
313
interpose in behalf of the tax-payer. Further than thus indicated, I do not discover in the many decisions in which that court has given construction to section 5219 any general principle laid down applicable to all cases that have arisen. The court has decided each case. upon its own special facts. The question has continually been, does the tax materially and injuriously discriminate against the shareholders of national banks? And in every case the question has. been rather one of fact than of law. In deciding that shareholders of national banks may be taxed at a rate in fixing which no account has been taken of the non-taxable United States bonds required by law to be held by those banks, the court has not made so absolute a ruling that, if it should be shown in any particular case that such omission operates as a material and injurious discrimination against national bank shareholders, in favor of other moneyed capitalists, the tax thus operating may not be pronounced illegal. The paramount question in every case is whether or not the tax, or system of taxation, complained of, materially and injuriously discriminates against national bank shareholders, in favor of other moneyed capitalists, in a degree tending to discourage investments in the shares of the national banks. Upon this question of fact the decisions of the supreme court have turned, and all decisions on this subject must turn. As already indicated, I do not think the tax complained of in the case under consideration can stand this test. The question need not be decided in the present case; but it is doubtful whether congress, in authorizing the states to tax the shares of national banks, under legislation of their own, prescribing the manner and place of doing so, intended thereby to authorize cities, counties, and towns to exercise the same power. The mere fact that municipal corporations may tax national banks at their pleasure would tend strongly to discourage investments in their shares; and no instance of such a tax has yet gone to the supreme court of the United States; but if the right exists, and if the city of Richmond may legitimately impose a tax on the national banks doing business within it, yet I think that the tax complained of here is one whose necessary effect must be to discourage investments in national banks. Congress requires the tax to be assessed as part of the personal property of the owners of the shares of the bank. It does not authorize a tax upon the bank itself. The city has no power to assess a tax upon the bank in 8ol·ido. It can assess only the shares, and these only as the property of the shareholders. There are 6,000 shares of the stock of this complainant, held doubtless by hundreds of different persons residing in Richmond and other cities, and in the counties surrounding Richmond, and in the state at large. By section 5210 of the United States Revised Statutes congress requires every national bank to keep at all times for public inspection "a full and correct list of the names and residences of all the shareholders in the association, and the number of shares held by each, in the office where its husiness is transacted." If it be within the legal power of the city of Richmond to tax the shares of those stockholders of the national banks here who are residents of the city, certainly that is the extent of its
314
:' 'l1EDERAL REPORTER,
vol. 39.
powerl Tt cannot tax thebankfl themselves. ItcaItta:x::only-'the shares oftheir shareholders, patt of their individual property, and of course' only of those shareholders who are its oWn resident citizens, and whose other personal property it may of right tax. It was practicable for the city to call fora list of the names and residences of the shareholders of the First National Bank of Richmond, and to tax the shares of those of them who were its own residents. It was not competent for it, in doing so, to assess the shares even of its own residents in such wise as to bar them from the privilege of offsetting the amount of the debts they might owe against the value of their shares in the bank and the other securities which they might hold; and especially was it not competent for the city, in laying its tax, to proceed upon the violent assumption that all the shares of the bank are held by residents of Richmond, and none by residents of other localities in Virginia and elsewhere. To assess the tax as if against the bank in 8olido, on a value made up of the whole amount of the bank's capital and surplUS fund, without deduction fur non-taxable securities, constituting nearly half the bank's capital; to require this tax to fall upon the whole body of the bank's shareholders, wherever resident, whether in Richm()nd or Virginia; and to give no shareholder the privilege of deducting the amount of his debts fr0111 that of securities due him in determining the net value of his estate,-these features of the tax complained of by the bill under considera.tion nIl seem'to me to condemn it as contrary alike to national, state, and municipal law, and as discriminating against the owners of national hank shares in favor of other moneyed capitalists, in a manner obnoxious to the policy of congress in regard to the national banks, and seriously discouraging to investments in national bank shares. I will sign a decree (If perpetual injunction, this ruling being founded on the decisions of the supreme court of the United States in the cases of Hills v. Bunk, 105 U. S. 319, and Whitbeck v. Bank, 127 U. S. 193, 8 Sup. Ct. Rep. 1121. In dealing with the subject I have also considered the decisions of thesulhe court in Van AUen v. AS8Ps8ors, 3 Wall. 573; People v. Commis8',:oners,' 4 Wall. 244; Bank v. Com., 9 Wall. 353; Bankv. New York, 121 U. S. 138. 7 Sup. Ct. Rep. 826; L1:onberger v. Rou8e, 9 \Vall. 475; Waite v. Dmoley, 94 U. S. 533; Supervisor8 v. Stanley, 105U. S. 311; Bwnk v. Kimb,W, 103 U. S. 733; Pelton v. Bank, 101 U; S. 143;Cumrni'rlU8 v. Bank,Id. 153; Bunk v: Davenport, 123 U. S. 83, 8 Sup. Ct. Rep. 73; and Peoplev. Weaver, 100 U. S. 539. The jurisdiction' of this COllrt, as a court of chancery; to entertain this bill, I have too plain to need discussion.
as
CARPENTER 'V. MEXICl\N . NAT. R.CO.
315
CARPENTER V.MEXICAN NAT.
R.
CO;
\ Oirplit Oourt, 1.
w: D.
Texas, San Anton(o Di-o. :May 17,1889.)
MASTEltANP SERVANT-FEUO",-SEltVANTS-BRAKEMAN AND CAR, INSPECTOR.
A car,inspector is not a fello'Y-servaJ;lt with Ii brakeman, but is a representa· tive of the employer. . . ". ;, '
2. SAME-RISJ>,S 'OF EMPLOYMENT-LATENT DEFECTS.
While 'a brakeman cannot' recover for injuries cauB1ld by defective brakes if he ·had, or by the exercise of reasonable prodence might havehad,kllOwl· edge of such defects, he is not bound to Look. for latent or hidden. OF FOR PERSONAL INJURIES.
3.
In estimating damages for 'personal iiljuries to cansed .by defective ,appliances, the jury may eousid,e:f(l) tl:\e v!tJue qf the time lost during the period of disability; (2) fair cQi1lpensatiim fortbe mental and physical suffering caused by the injury; '(3) the probable effect of the injnTY upon plaintiff's future health, aqd ability to earn pursue the course . of life for which he was fitted. At Law. Action by W. J. Carpenter for danlnges for personal injl;lries. S, G. Newton, W. Showalter, and C. C. Pierce, for plaintiff. Thomas, W. Dodd, for defendant. "
MAXEY;, J., (charging ,jury.) The plaiJ,ltiff, W. J. Carpenter, brings this suit to recover damages of the defendant, the Mexican National Railroad Company, and his petition alleges that at the time he received the injuries complained of he was employed in the service of the defendant as a brakernan, and was then performing his usual duties as such employe; that his injuries resulted from the negligence ofdefendant in failing to furnish the cars upon which he was working with proper and safe brakes and machinery for stopping the train. The accident occurred at or near a place called" El Puerto," in the republic of Mexico, on the 30th of April, 1888. To inform you more accurately of the plaintiff's cause of action, I will read to you the following extracts from his peti. tion: "That when said train upon which said defendant was employed arrived at said place called' EI Puerto,' and began to descend said down grade, plaintiff and two other employes set all the brakes upon all the cars in said train with great care, and as rapidly as the same could be done, but that said brakes would not work, and were not fit for the purpose for which they were used, and could not be made to press SUfficiently upon the car-wheels to check the motion of the train; that the chains and all the machinery of the said brakes were defective in construction, and not in good and safe condition, and were not fit and adapted for the purposes for which they were used; that beoause said machinery of said brakes would not work, said train of cars upon which plaintiff was employed, upon entering upon said down grade, began to move down the said grade at a terrific and dangerous rate of speed, and that there were no means to check the said train, and that said train becameunmanageable; that plaintiff and his fellow-brakeman did everything that skillful and prudent men in such affairs could do to check and control said train, and to preserve thE'ir own lives and limbs; that, while said train was so moving at