By the Gov/rt
Berry, J.
That the State taxation of the shares of stock in national banks, is, under the legislation of Congress, per se lawful, has been determined by the Supreme Court of the Hnited States, in the recent case of VanAllen v. The Assessors, 3 Wal. 573. While we deem it not improperio remark that some portions of thereasoning found in the prevailing opinion pronounced in this case are unsatisfactory to our minds, and would, as we think, lead to startling consequences, we follow this adjudication by the tribunal of last resort and paramount authority, as in duty bound to do.
It was assumed by the court and counsel in VanAllen v. The Assessors, that Congress possessed authority to pass the national banking law, and to grant the new rights and privileges thereby conferred. The same assumption is made i n the case at bar, and neither party could have any interest in calling it in question. It would seem to follow that if it be a legitimate exercise of the constitutional powers of Congress to establish a national banking system, Congress must, in the absence of express inhibition, possess the right to surround that system with whatever safe-guard may be necessary and proper to protect the banks organized thereunder, and their stockholders, from injury by the States. And if in the exercise of legislative discretion to this end, Congress sees fit, as it has done, to regulate the taxing power of the States over [503] these institutions, that exercise is not to be questioned; because, by the the terms of the Federal Constitution “the laws of the United States which shall be made in pursuance thereof, * * * * shall be the supreme law of the land, and the judges in every State shall be bound thereby, anything in the constitution or laws of any State to the contrary notwithstanding.”
It is then not necessary nor important to inquire whether the 41st Sec. of the national banking act, by which it is provided, among other things, that nothing contained in the act shall be construed to prevent the shares of stock from being included, in the valuation made for the assessment of taxes imposed ly or wider State cmthority, is to be regarded as a permission to the States to tax that which, without such permission they could not tax, or as a regulation or restriction of a taxing power inherent in the State, and underived from the general government. In either case the taxes must be imposed “by or under State authority,” and to State constitutions and laws must State officers look for the rules by which they are to be guided in levying and collecting taxes. If this provision in Sec. 41 be in the nature of a permission, then State laws can operate only to the extent of such permission. If the provision be a regulation simply, then State law can operate only in obedience to it.
It becomes necessary, therefore, to examine our State constitution and laws, to ascertain whether authority is there given to tax the shares in question, consistently with the conditions imposed by Congress. Let us see first what these conditions are. Section 41 before cited enacts, “that nothing in this act shall be construed to prevent all the shares in any of said associations held by any person or body corporate, from being included in the valuation of the personal property of such person or corporation in the assessment of taxes imposed by or under State authority, at the place where such bank is located, and not elsewhere, but not at a greater rate [504] than is assessed upon other moneyed capital in the hands of individuals of such States. (2.) Provided further, that the tax so imposed under the laws of any State upon the shares of any of the associations authorized by this act, shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the State where such association ■ is located.”
The construction which we place up'on these provisions is, that the taxes authorized must be imposed upon the shares eo nomine, and in no other way. Whether a tax in some other form, but equivalent in rate or amount would have answered all purposes to prevent unfair discrimination or not, Congress has pointed out the kind ofinterestuponwAzcA^hepersonwAcm, and the place where the taxes may be levied, and has thus excluded every other mode of taxation. As to the last proviso cited, that the tax imposed upon shares in national banks shall not exceed the rate imposed upon the shares of State banks, we hold that it is not necessary that State banks should exist in order to justify the taxation of the shares in national banks.
Manifestly, the object of the provision was to prevent unfair discrimination against the national banks, and in favor ot State banks. If there be no State banks, and none.authorized by law, no such discrimination is possible, and the provision can, therefore, have no operation. And we are confirmed in this view by the further consideration that it was expected and believed that the national banks with their enlarged privileges would drive the State banks out of existence. The result is fast justifying the expectation. That such was the intention, is asserted in the dissenting opinion pronounced by Chief Justice Chase (in VanAllen v. The Assessors,) under whose direction, as Secretary of the Treasury, the act was prepared. With this prospect in view, it is not to be presumed that Congress, as a compensation to the States for the withdrawal from taxation of the immense capital invested in State banks, would [505] proffer the empty delusion of a privilege to tax the stock of national banks, at the same time mailing that privilege dependent upon a state of things which would speedily cease to exist. But even if there be no State banks in actual operation, the fact that they may exist under a State law, would be as fatal to the exercise of the right to tax the shares in national banks as if such State banks were in actual existence, unless the State laws also provide for a taxation of State banks, equivalent at least, to a tax upon the shares of national banks. The lams of the State must, in this respect, be conformed to the law of Congress.
Ve now proceed to the examination of our Constitution and laws, for the purpose of ascertaining whether they permit the taxation of these shares, and whether they are in harmony with the act of Congress. Sec. 3, Art. 9, of our Constitution, provides that “ laws shall be passed taxing all moneys, credits, investments in bonds, stocks, joint stock companies or otherwise, and also all real and personal property according to its true value in money,” with certain exemptions not important in this case. This enumeration would, manifestly, include shares of stock in national banks. But it is urged that Sec. 4 of the same article makes an exclusive provision for legislation subjecting all banks and all bankers, and their property as such banks and bankers -to taxation. Sec. 4 reads as follows : “ Laws shall be passed for taxing the notes and bills discounted or purchased, money loaned, and all other property, effects, or dues of every .description, of all banks, and of all bankers, so that all property employed in banking, shall always be subject to a taxation equal to that imposed on the property of individuals.” It is contended by the counsel for the banks, that the language “all bcmJcs and all bankers” includes national as well State banks, and that if this be so, national as well as State banks must be taxed, and onkj taxed under some law enacted in pursuance of and in compliance to this imperative requirement of the Constitution. In answer to [506] this, it is said, and certainly with some plausibility, that Section 4 refers solely to banks organized under the law of this State, and over which the State, could exercise complete jurisdiction. It is also to be observed that as the only tax permissible, as to national banks, is a tax upon shares against the holders thereof, Section 4 could not apply to national banks. But assuming that the words “ all banks and all bankers ” are unlimited in their signification, and in terms comprehend banks and bankers of every description, whether authorized by the laws of this or any other State, or of the United States, let us look at the effeet which is to be given to these words when read in connection with the Constitution and laws of the United States. By the provision already cited from the Federal Constitution, “the Constitution and laws of the United States which shall be made in pursuance thereof,” are made “ the supreme law of the land.” If then, as we have endeavored to show, the national bank act passed in pursuance of the Constitution, exclusively restricts the right of the State to tax the property employed in banking by the national banks to the taxation of the shares of stock held therein, the national bank act, as a part of “the supreme law of the land,” withdraws the national banks from the operation of that portion of our State Constitution, (to-wit: Sec. 4 above cited,) by which it is contended and assumed a special, definite and exclusive rule is laid down for the guidance of our Legislature in subjecting to taxation all property employed in banking by uall banks and all bankers.” But notwithstanding this result, Section 3 of Art. 9 before quoted, which requires laws to be passed for the taxation of all property, real and personal, remains unaffected. Among the different species of property there enumerated, we find “investments in stocks,” and “joint stock companies,” which designations obviously include shares of stock in national banks. State constitutions and State laws must be construed as subject to the supremacy of the Constitution and laws of the United States, and thus construing the [507] Constitution of Minnesota, we are brought to the conclusion that Section 4 before referred to, is rendered inoperative as to national banks by the 41st section of the national bank act, but that as our State Constitution requires all property to be taxed, we may properly look at Section 3 as conferring upon our Legislature the authority necessary to reach the shares of stock sought to be taxed in these actions. Our Constitution in terms, directs the Legislature to pass laws for the taxation of United States stocks; yet it is, in this respect, controlled by the supreme law of the land, both under the doctrines enunciated by Chief Justice Marshall, in the great case of McCulloch v. The State of Maryland, and latterly by express congressional legislation, specifically exempting United States securities from taxation; and so far as it is repugnant to the supreme law, it is inoperative. Applying the same principle, Section 4 is inoperative as regards the taxation of national banks, and we fall back upon the general provision of Section 3, under which laws may be passed to reach the shades of these associations.
We conclude, then, that the Constitution authorizes legislation for the purpose of taxing the shares in national banks. It remains to examine our laws in order to determine whether they furnish authority for the taxation sought to be imposed in the eases at bar. ifhe provisions of law bearing upon the questions arising in these cases, are found in Chapter 1 of the laws of 1860, entitled “ An act to provide for the assessment and taxation of all property in this State, and for levying taxes thereon according to its true value in money,” and in an act amendatory thereof, being Chapter 1 of the laws of 1861. The first question to be considered is, do these laws authorize the taxation of the shares eo nomine of national banking associations. Section 1, Ch. 1, Laws of 1860, reads as follows: “ That all property, whether real or personal, in this State, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise, of persons residing h&rein, [508] the property of corporations now existing or hereafter created, and the property of all banks or banking companies now existing or hereafter created, and of all bankers except such as is hereinafter expressly exempted, shall be subject to taxation, and such property, moneys, credits, investments in bonds, joint stock companies, or otherwise, or the value thereof, shall be entered in the list of taxable property for that purpose, in manner prescribed by this act.” By Section 2, as amended by the law of 1861, it is enacted that “ the terra £ investments in stocks,’ wherever used in this act, shall be held to mean and include all moneys invested in the public stocks of this or any other State, or of the United States, or in any association, corporation, joint stock company, or otherwise, the stock or capital of which is or may be divided into shares which are transferable by each owner without the consent of the other partners or stockholders, for the taxation of which no special provision is made by this act, held by persons residing in this State, either for themselves, or as guardians, trustees or agents.” The same section further provides that “ the term £ personal property ’ wherever used in this act shall be held to mean and include,” among other things not important here, “the capital stock, undivided profits, and all other means, not forming part of the capital stock of every company, whether incorporated or unincorporated, and every share, portion or interest in such stocks, profits or means, by whatsoever name the same may be designated,” &c., &c., the balance of the definition not applying to this case.
A careful examination of the different species of property subject to taxation by the laws referred to, will show that the shares in national banks must be included, if at all, in “investments in stocks,” and in “personal property,” as thus defined in the statutes, unless they fall within the exception found in section 2, of moneys invested in stocks or shares, for the taxation of which special provision is made in the tax act, and it will also be observed from the reading of sections [509]*5091, 4, 6, 7, 8, 16, 17, 18, 19, 20, 42, 43, 54, 55, 56, 57, 60, 65, that the general theory of our system of taxation is, that all taxable personal property is to be listed for taxation. The list is the basis upon which the assessment rests. In all cases it is made the special duty of some designated person to make and return the list, and it is only upon the list required to be made out and returned that taxes can be "assessed, unless in cases of neglect or refusal to list, which does not affect the general principle. If there be any species of personal property which no person is required to list and return, it escapes taxation. If there be any species of property which is required to be" listed and returned in such form that its taxation is impracticable, under the national banking act, or any other law of the United States, such species of property also escapes taxation. And by section 43 of the act of 1860, the county auditor is to assess the taxes, in the name of each person, company or corporation listing the personal property. The auditor of State performs a similar duty in regard to banks incorporated by the laws of this State. (See section 62, laws of 1860, as amended by section 19, laws of 1861.) To return, and apply these provisions of law by which the listing is regulated, it becomes important to ascertain who is required to list shares of national banks, and if it turns out that no person is required to list them, it follows that no person is required to pay taxes on them. It is clear that they are not required to be listed under sections 54, 55, 57 or 59 of the law of 1860, because those provisions relate only to banks incorporated or organized under the laws of the State, .and these are the only provisions relating to the listing of banks by name. Are they required to be listed under the provision relating to bankers and brokers ? Section 15, page 25, laws of 1861, amendatory of section 56, law of 1860, defines bankers and brokers as follows : “ Every person who shall have money employed in the business of dealing in coin, notes, or bills of exchange, or in the business of dealing in [510] or buying, or shaving any kind of bills of exchange, checks, drafts, bank notes, promissory notes, bonds, or other writing obligatory, or stocks of any kind or description whatever, shall be held to be a banker, broker, or stock jobber; and in making out their statement for taxation as required by the 60th section of this act, shall include in his statement the average value estimated, as provided in the 54th and 55th section of this act, and of all moneys, notes, bills of exchange, bonds, stocks, or other property appertaining to his business, as a banker, broker, or stock jobber, which he shall have had, etc., etc.”
It is to be observed that no attempt was made in the cases at bar to comply with the provisions of law relating to “ bankers and brokers.” The assessment here was made by the assessor, while bankers and brokers make their return under section 17, page 26, laws 1861, to the county auditor, who enters the property returned for taxation. Nor was the assessment attempted to be made upon any statement such as is required of bankers and brokers, but upon sha/res in the hands of individuals. If the stockholders could be regarded as bankers or brokers, or rather if the bank was regarded as a banker or broker, then by section 4 of the tax law of 1860, as amended on page 18, laws 1861, the property “ of every company, firm, body politic or corporation,” is required to be listed “by the president or principal accounting officer, partner or agent thereof.” The same rule is recognized in section 62, as amended on page 27, laws 1861. But we are of opinion that neither the bank nor the shareholders could be required to list as bankers or brokers under our laws, since, as we have seen, the only tax which can be imposed upon the property employed in banking in national banks, is a tax upon sha/res. The statutory provision as to the listing by bankers and brokers, and the taxation of the listed property, could not apply here.
[511] We have next to consider whether these shares are required to be listed under section 16, of the law of 1860, which is as follows: “ The president, secretary, or principal accounting officer of every canal, or slack water navigation company * * -K- * telegraph company, or other joint stock company, except banking, or other corporations, whose taxation is specifically provided for in this act, for whatever purpose they may have been created, whether incorporated by any .law of this State or not, shall list for taxation * * * all the personal property, * * * moneys and assets of such company or corporation within the State, at the actual value in money, etc., etc.”
This section also requires the return to be made to the country auditor, and does not contemplate an assessment by the assessor. We are of opinion that neither the national banks nor their shareholders are bankers or brokers within the meaning of our statute, but that the bank is a “joint stock company,” within the meaning of section 16, just cited, and a joint stock company not included ip the exception (foundpn Sec. 16) of banking arid other corporations, whose taxation is specially provided for in the tax laws. If this be so, it follows that the shares in national banks are not required to be listed by, nor taxed to the individual shareholders, but are to be listed, if at all, (under Sec. 16, as well as Sec. 1,) by the president, secretary, or principal accounting officer of the joint stock company, which is the banking association, and taxed, (if at all,) accordingly. It also follows that these shares are not “investments in stocks,” within the statutory definition which the individual is required to list, because special provision is made for theirr taxation in another wary. See Sec. 2, page 11, Laws 1861, before cited.
Concisely stated, our conclusions are, that the shares of national banks must be taxed eo nomine; that they cannot be taxed under the statutory provisions relating to banks, to bankers and brokers, to joint stock companies, or to individ[512] uals, and therefore they cannot be taxed at all in the present state of our laws. As the question of the right to tax the shares of national banks is one of great public importance, we shall proceed to state our views upon some other matters that were presented at bar. The 41st section of the national banking act contains a proviso (already quoted) as follows: “Providedfw'ther, that the tax so imposed under the laws of any State, upon the shares of any of the associations authorized by this act, shall not exceed the rate imposed upon the shares in any of the banks organized under authority of the State where such association is located.” We are inclined to hold that this does not require that the tax imposed upon the State banks must be a tax upon the shares of the State banks eo noimme. At any rate the design of this proviso being to prevent unfriendly discrimination, the taxation upon the State banks must at the very least, be an equivalent for the tax upon the shares in national banks. A tax upon the capital stock of a State bank, when the capital consists in part of United States bonds, would be obnoxious to the objection stated in Bank Tax Case, 2 Wallace, 200, and clearly would not furnish the necessary equivalent. A tax upon the business of the bank as upon loans and discounts, might or might not be equivalent in rate to a tax upon the shares; depending as it would, upon the activity of business operations, it would furnish a standard uncertain and varying. According to the reasoning of Justice Nelson in Van Allen v. The Assessors, a tax upon all the shares is not a tax upon the capital stock.
We feel some hesitation in adopting this view, which was only one of the grounds upon which the determination of that case rested; however, if the distinction taken between a tax upon all the shares and upon the capital stock be sound, there would seem to be no difficulty in taxing all .the shares in the State banks, whether the capital was invested in United States securities or not, and in this way securing exact equivalence. In the present condition of our laws, as there is no provision [513] for taxing all the.shares in State banks, either eo nonvme to the holders, or in effect, by taxing the whole capital stock and property of the bank as the aggregate of the shares, whether the capital be composed in whole or in part of federal securities, it is dear that for this reason, if for no other, we are precluded from taxing the shares to which this action relates.
We are also of opinion that the distinction as to the taxation of “personalproperty” and “investments in stock, ” between persons residing and not residing in the State, if applied to shares of State banks, would be fatal to the equivalence before spoken of. In such case, if the share holders in a State bank were all non-residents, the shares might escape taxation altogether, and thus discrimination against national banks prevail in its worst form. The'41st section further provides that the shares of national banks must be taxed in the town or ward where such, banking association is located, and not elsewhere.
Section 4 of the tax law of 1860, as amended on page 18 of Laws of 1861, provides that “ all real property, and merchants’ and manufacturers’ stock, and all the articles enumerated in the seventh section of this act, and all personal property upon farms, and real property not in towns, shall be returned for taxation and taxed in the townships and towns in which it is situated; and all other personal property shall be entered for taxation in the township and town in which the person charged with the tax thereon resided at the time the list thereof was taken by the assessor, if such person reside in the county where such property was listed, and if not, then such property shall be entered for taxation and taxed in the township where situated when listed, anything in this act to the contrary notwithstanding.”
Leaving out of view the objection as to listing, which we have already considered, the question now is:
Do our State laws permit the taxation of these national bank shares at the place where the bank is located ? It is [514] conceded, that personal property of the nature of bank shares ordinarily follows the situs of the owner — that it is situated where the owner is situated. But it is claimed that this is an artificial rule, and that while our statute requires “ all other personal property,” including shares in national banks, to be taxed where situated, it does not expressly point out the place where property of the intangible nature of bank shares is to be deemed situated. It is, however, conceded that under the ordinary rule “this description .of property, in the absence of statutory provisions, would be deemed to be situated where the owner resided,” but it was added that “ there was nothing to prevent Congress from assigning to these shares of stock a situs for the purpose of taxation. And it is claimed that the effect of the act of Congress has been to “ impress ” the situs of the bank upon the shares, and the conclusion sought to be drawn is, that the terms “ where situated ” in our State tax law are to be taken as equivalent to the language “ where situated for the purpose of taxation under the law of Congress.” We do not agree to this. Our law providing that property of this description is to be taxed “ where situated,” and being silent as to the definition of these words, by implication adopts the ordinary rule before referred to, that personal property of the nature of bank shares follows the situs of the owner; and before a different situs, namely that of the bank, can be impressed upon the shares for the purpose of “ a tax wvposed by or u/ader the law of any State,” our statute must be conformed to the act of Congress.
So far as Harrison is concerned, who resides at Minneapolis, while the bank is located at St. Paul, the objection as to the place of taxation would be fatal to the tax sought to be collected of him. It appears that Webb’s shares were entered by the County Auditor as an item separate from his personal property, and a separate tax against such shares carried out in the column opposite. We see no substantial error in this respect.
[515] It will be seen, then, that upon several grounds we arrive at the conclusion that the order and judgment of the court below, dismissing the - proceedings to enforce the collection of the taxes upon the shares of these national banks must be affirmed. ‘
We learn that the question as to the right of the States to tax shares of national banks is to be re-argued, and considered anew in the Supreme' Court of the United States; but as important interests require an early determination of the cases at bar, we have thought best not to delay longer, although aware that the possible rejection of the doctrines announced in Van Allen v. The Assessors, and the denial of the right to impose State taxation upon shares in national banks would render any examination of our local Constitution and laws unnecessary. The last clause of Sec. 4, p. 156 of the General Statutes, (Revision of 1866,) relating to taxation of shares in national banks alluded to upon the argument, can have no application to taxes levied before the passage. We do not, therefore, consider it specifically, though the question as to its validity may be indirectly disposed of in the views herein expressed.