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Citizens National Bank v. Kentucky, 217 U.S. 443 (1910)

Citizens National Bank v. Kentucky

No. 135

Argued March 10, 1910

Decided May 2, 1910

217 U.S. 443


An act assessing stockholders of national banks, although illegal as to a class of stockholders not similarly taxed on shares in other moneyed institutions, may be legal as to the class which is similarly taxed, and so held that § 3 of the Act of March 21, 1900, of Kentucky, providing for back assessments on shares of national banks, although not legal as to nonresident stockholders, there having been no statute prior to 1900, providing for the assessing of stock of nonresident stockholders of other moneyed corporations, is not illegal as to resident

Page 217 U. S. 444

stockholders, as there were statutory provisions for assessing them for stocks in other moneyed corporations of the state prior to 1900. Covington v. First National Bank, 198 U. S. 100, distinguished.

A statute is not lacking in due process of law within the Fourteenth Amendment if it simply provides a new remedy for collecting a tax liability already legally existing under prior law.

A state statute may make a bank the agent for its own shareholders in compelling returns, and make it liable for taxes assessed against the shareholders.

The constitutionality of a statute cannot be attacked because it relates to a certain class by one not of that class.

Shares of stock of a national bank pass from one holder to another subject to the burden of taxes, and if not properly returned for taxation as required by law, the liability remains until barred by limitation, and may be enforced although the stock has been transferred.

Liability for a tax is not subject to rules applicable to the vendor's equity of one buying without notice. Seattle v. Kelleher, 195 U. S. 351.

The fact that the par value of shares of a national bank has been reduced does not affect the right of taxation or to back-assess unlisted shares. The shares are the same although reduced.

Citizens' Savings Bank v. Owensboro, 173 U. S. 636; Covington v. First National Bank, 198 U. S. 100, followed to effect that the Act of March 21, 1900, of Kentucky, does not impair the obligation of the supposed contract under the Hewitt Bank Act of that state.

The facts, which involve the validity of the statute of Kentucky of March 21, 1900, in regard to taxation of shares of stock of national banks, are stated in the opinion.

Page 217 U. S. 447

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