DixoN, C. J.
The first question to be considered is, whether the 41st section of the national banking act, authorizing taxation by the states of shares in the national banks, requires that the tax imposed by the state upon the state banks shall be, eo nomine, a tax upon the shares of those banks. Taxation by state authority of national banks must be upon the shares, because the law of congress so expressly provides. Must the tax imposed by the state upon the state banks be also upon the shares in those banks, before the state can lawfully exercise the power conferred by congress to tax the shares in the national banks % This is a question as to the proper construction of the 41st section, above referred to, and one which must be ultimately answered by the supreme court of the United [662]*662States. It is a question which lies at the very foundation of the proceedings we are required to investigate. If the state banks must be taxed upon the shares, and in no other way, in order to justify the levying of a tax by the state upon the shares in the national banks, that is decisive of this case, and not of this case only, but of every other case arising under our banking law, as it stood prior to its amendment, by act of the legislature and vote of the people in 1866, so as to require the payment of taxes upon the shares in the state banks, instead of taxes upon the amount of capital stock of such banks, as theretofore provided by law. Is such the true construction of the section in question? If it is, then it will readily be seen, that in many of the states, and in this state in particular, the just and beneficent designs of congress in authorizing the states to tax the shares in the national banks, were, for a considerable period of time at least, to be defeated by the very terms of the act by which the authority was granted. It will hardly be contended that such was the intention of congress. The intention clearly was, that the property or capital of citizens thus employed should be subject to the same, but not to a greater rate of taxation than is imposed by the state upon the property or capital of the citizens devoted to other purposes, and which is not especially exempt from! taxation. It would not, perhaps, be strictly accurate to say that this question of the proper construction of the law of congress, has been directly adjudicated by the supreme court of the United States. It has been supposed by some, however, to have received a practical exposition in that court, which is to the effect that the tax imposed by the state upon the state banks, need not necessarily be upon the shares in order to justify the levying of a tax upon the shares in the national banks. Such is the opinion of the supreme court of the state of Ohio, in Frazer v. Seibern, 16 Ohio St. 620, 621. After referring to the cases of Van Allen v. The Assessors, S Wallace, 244, that [663]*663court says: “ It must be premised tbat in the cases referred to, tbe supreme court’ of tbe United States hare put a more liberal construction upon tbe word £ shares,’ as here used, in favor of tbe power to tax, than they have upon tbe same word when designating shares in tbe national banks. Tbat court bolds tbat tbe equivalent taxation necessary to justify a tax upon tbe shares in national banks, may either be upon the shares of tbe individual stockholders in the state banks, and assessed against the stockholders, or it may be upon tbe capital of tbe bank, and assessed against tbe bank itself; provided, only, tbat it be a full equivalent. Tbe tax against the owner of shares in the national banks, must not exceed tbat imposed, in some forni, upon tbe state banks or their stockholders.” To tbe same effect is tbe opinion of tbe supreme court of Minnesota, in tbe case of County Treasurer v. Webb and Harrison, 11 Minn. 512. On tbé other band, tbe supreme court of Iowa, in tbe recent case of Hubbard v. Supervisors of Johnson Co., and other cases decided at tbe same time, seems to have arrived at directly tbe opposite conclusion; and so tbe reporter states tbe point decided in Bradley v. The People, 4 Wallace, 459.
Tbe words of tbe act upon which this conflict of opinion has arisen, are found in tbe second proviso of tbe 41st section, which reads as follows: “ Provided further, tbat tbe tax so imposed under the laws of any state upon tbe shares of any of tbe associations authorized by this act shall not exceed tbe rate imposed upon tbe shares in any of the banks organized under authority of the state where such association is located.” Tbe object of this proviso is apparent. It is a limitation of tbe general power previously conferred, intended to secure tbe national banks against any discrimination unfriendly to them and in favor of tbe state banks, in matters of state taxation. Such security being easily attained without any change by congress of tbe mode of taxing tbe state banks by tbe state, and the same being fully provided, it seems somewhat inconsistent [664]*664with the language of the proviso, that it should be held to have still further effect, and that congress has prescribed a mode by which the state banks must be taxed. If such had been the intention of congress, language adapted to that purpose would no doubt have been used, and the proviso would have read something like this: “ Provided further, that the banks organized under authority of the state where such association is located shall be taxed upon the shares in such banks, and that the tax 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 by the same state upon the shares of any of the state banks.” It is furthermore to be considered, that the mode of taxing the state banks by the states is not a matter of national concern, only so far as it may infringe the rule of taxation prescribed by congress for the national banks. Within that rule the states may well be at liberty to tax their own banks as they see fit, and I cannot but think it was the intention of congress not to interfere with them. I think, therefore, that the word “ shares,” as here used with reference to the. state banks, may well receive a more liberal construction than the same word when elsewhere employed to designate the shares of the national banks as being the proper subjects of state taxation. In the one case it is used to specify the particular property which may be taxed; in the other, not for that purpose, but in a more general sense, in a clause intended only to limit the rate of such taxation.
Now, on turning to the decisions of the supreme court of the United States, I find this view greatly strengthened, if not fully supported, by them. The case of Van Allen v. The Assessors, may almost be said to be entirely decisive of the question. That case went up from the Court of Appeals of New York, upon the enabling act passed by that state in March, 1865, which taxed the state banks, not upon their shares, but upon their eajpital. By the same act, taxes at [665]*665tbe same rate were imposed upon tbe shares in tbe national banks, not exceeding tbeir par value. The court held tbe act invalid, because tbe capital of the state banks might consist of tbe bonds of tbe United States, which were exempt from such taxation. “ It is easy to see,” say tbe court, “ that this tax on tbe capital is not an equivalent
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DixoN, C. J.
The first question to be considered is, whether the 41st section of the national banking act, authorizing taxation by the states of shares in the national banks, requires that the tax imposed by the state upon the state banks shall be, eo nomine, a tax upon the shares of those banks. Taxation by state authority of national banks must be upon the shares, because the law of congress so expressly provides. Must the tax imposed by the state upon the state banks be also upon the shares in those banks, before the state can lawfully exercise the power conferred by congress to tax the shares in the national banks % This is a question as to the proper construction of the 41st section, above referred to, and one which must be ultimately answered by the supreme court of the United [662]*662States. It is a question which lies at the very foundation of the proceedings we are required to investigate. If the state banks must be taxed upon the shares, and in no other way, in order to justify the levying of a tax by the state upon the shares in the national banks, that is decisive of this case, and not of this case only, but of every other case arising under our banking law, as it stood prior to its amendment, by act of the legislature and vote of the people in 1866, so as to require the payment of taxes upon the shares in the state banks, instead of taxes upon the amount of capital stock of such banks, as theretofore provided by law. Is such the true construction of the section in question? If it is, then it will readily be seen, that in many of the states, and in this state in particular, the just and beneficent designs of congress in authorizing the states to tax the shares in the national banks, were, for a considerable period of time at least, to be defeated by the very terms of the act by which the authority was granted. It will hardly be contended that such was the intention of congress. The intention clearly was, that the property or capital of citizens thus employed should be subject to the same, but not to a greater rate of taxation than is imposed by the state upon the property or capital of the citizens devoted to other purposes, and which is not especially exempt from! taxation. It would not, perhaps, be strictly accurate to say that this question of the proper construction of the law of congress, has been directly adjudicated by the supreme court of the United States. It has been supposed by some, however, to have received a practical exposition in that court, which is to the effect that the tax imposed by the state upon the state banks, need not necessarily be upon the shares in order to justify the levying of a tax upon the shares in the national banks. Such is the opinion of the supreme court of the state of Ohio, in Frazer v. Seibern, 16 Ohio St. 620, 621. After referring to the cases of Van Allen v. The Assessors, S Wallace, 244, that [663]*663court says: “ It must be premised tbat in the cases referred to, tbe supreme court’ of tbe United States hare put a more liberal construction upon tbe word £ shares,’ as here used, in favor of tbe power to tax, than they have upon tbe same word when designating shares in tbe national banks. Tbat court bolds tbat tbe equivalent taxation necessary to justify a tax upon tbe shares in national banks, may either be upon the shares of tbe individual stockholders in the state banks, and assessed against the stockholders, or it may be upon tbe capital of tbe bank, and assessed against tbe bank itself; provided, only, tbat it be a full equivalent. Tbe tax against the owner of shares in the national banks, must not exceed tbat imposed, in some forni, upon tbe state banks or their stockholders.” To tbe same effect is tbe opinion of tbe supreme court of Minnesota, in tbe case of County Treasurer v. Webb and Harrison, 11 Minn. 512. On tbé other band, tbe supreme court of Iowa, in tbe recent case of Hubbard v. Supervisors of Johnson Co., and other cases decided at tbe same time, seems to have arrived at directly tbe opposite conclusion; and so tbe reporter states tbe point decided in Bradley v. The People, 4 Wallace, 459.
Tbe words of tbe act upon which this conflict of opinion has arisen, are found in tbe second proviso of tbe 41st section, which reads as follows: “ Provided further, tbat tbe tax so imposed under the laws of any state upon tbe shares of any of tbe associations authorized by this act shall not exceed tbe rate imposed upon tbe shares in any of the banks organized under authority of the state where such association is located.” Tbe object of this proviso is apparent. It is a limitation of tbe general power previously conferred, intended to secure tbe national banks against any discrimination unfriendly to them and in favor of tbe state banks, in matters of state taxation. Such security being easily attained without any change by congress of tbe mode of taxing tbe state banks by tbe state, and the same being fully provided, it seems somewhat inconsistent [664]*664with the language of the proviso, that it should be held to have still further effect, and that congress has prescribed a mode by which the state banks must be taxed. If such had been the intention of congress, language adapted to that purpose would no doubt have been used, and the proviso would have read something like this: “ Provided further, that the banks organized under authority of the state where such association is located shall be taxed upon the shares in such banks, and that the tax 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 by the same state upon the shares of any of the state banks.” It is furthermore to be considered, that the mode of taxing the state banks by the states is not a matter of national concern, only so far as it may infringe the rule of taxation prescribed by congress for the national banks. Within that rule the states may well be at liberty to tax their own banks as they see fit, and I cannot but think it was the intention of congress not to interfere with them. I think, therefore, that the word “ shares,” as here used with reference to the. state banks, may well receive a more liberal construction than the same word when elsewhere employed to designate the shares of the national banks as being the proper subjects of state taxation. In the one case it is used to specify the particular property which may be taxed; in the other, not for that purpose, but in a more general sense, in a clause intended only to limit the rate of such taxation.
Now, on turning to the decisions of the supreme court of the United States, I find this view greatly strengthened, if not fully supported, by them. The case of Van Allen v. The Assessors, may almost be said to be entirely decisive of the question. That case went up from the Court of Appeals of New York, upon the enabling act passed by that state in March, 1865, which taxed the state banks, not upon their shares, but upon their eajpital. By the same act, taxes at [665]*665tbe same rate were imposed upon tbe shares in tbe national banks, not exceeding tbeir par value. The court held tbe act invalid, because tbe capital of the state banks might consist of tbe bonds of tbe United States, which were exempt from such taxation. “ It is easy to see,” say tbe court, “ that this tax on tbe capital is not an equivalent for tbe tax on tbe shares of the stockholders.” This was assuming in the clearest possible manner, that tbe act was not invalid because it taxed the state banks upon tbeir capital and tbe national banks upon tbeir'shares, but that that mode of taxation was unobjectionable provided it was equivalent', or did not infringe tbe rule of equality established by congress. It is difficult to conceive why tbe court should have decided tbe case on this ground, if tbe other objection bad really been supposed to exist; for, as I have said, it is an objection which'goes to tbe foundation of tbe proceeding, and one which must have met the court at tbe very threshold. Again, the case of Bradley v. The People was decided on tbe same ground. Deferring to Van Allen v. The Assessors, tbe court say, that “the tax in that case was attempted to be sustained on tbe same ground relied on here, that the tax on tbe 'capital was equivalent to a tax on tbe shares, as respected tbe shareholders. But tbe position was answered, that, admitting it to be so, ye.tinasmuch as the capital of tbe state banks may consist of tbe bonds of tbe United States, which lire exempt from state taxation, it was not easy to see that the tax was an equivalent to a tax on tbe shares.” I find no other decision by that court, or opinion intimated, in conflict with tbe position assumed in these and other cases; and I therefore conclude that the states may lawfully tax tbe capital of tbeir own banks and tbe shares in tbe national banks, provided such taxation be not unequal, or so imposed as to discriminate in favor of tbe state banks and against tbe national banks.
Having arrived at this conclusion, the next point of inquiry [666]*666is, whether the tax of one and one-half per cent imposed by the law of this state upon the capital of the state banks was in all cases equivalent to the tax of the same rate assessed upon the shares in the national banks by the act of April 8, 1865. Laws of 1865, chap. 400. It is not denied that taxes thus imposed are or would be equivalent, provided no part of the capital of the state banks was exempt from taxation; but as the capital of the state banks may, under our banking law, consist of the bonds of the United States not liable to state taxation, it is insisted that the same objection existed here that existed in New York and some other states, where the question has arisen. To this it is answered, that our banking law differed from that of New York and the others in this, that the tax imposed on the capital of our state banks was a tax annexed to the franchise as a royalty for the grant, and consequently one w'hicli the banks must pay, even 'though the securities deposited did consist of stocks of the United States otherwise exempt from, taxation. This position was sanctioned by the supreme court in Bank of Commerce v. New York City, 2 Black, 628, and is undoubtedly correct. The banks of this state were taxed, not upon valuation like the property of individuals, but on the amount of the nominal capital, without regard to loss or depreciation. E. S., chap. 71, § 20. The sum thus exacted by the state was one of the conditions upon which the franchise was granted, and as such was not in conflict with any right of the federal government.
It only remains to be considered, whether the act of April 8th is in conflict with the first proviso of the 41st section, or with our own constitution. The material words of that proviso are, that the shares of the national banks shall be taxed “not at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such state.” It is provided by section 3 of the act of April 8th, that the shares in the national banks shall be taxed on the par [667]*667value. Tbe seventh section provides that whenever the tax assessed upon other moneyed capital in the hands of individual citizens of the state, shall be less than one and one-half per centum, it shall be the duty of the state treasurer to reduce correspondingly the tax upon the stock of said banking associations, and to require the payment only of such reduced tax. As suggested by counsel for the state, the only particular of this legislation which seems liable to any objection is, that the shares in the national banks are required to be taxed at their par value. If the shares in any national bank should at any time be worth less than par, then the tax upon them at par might exceed the rate imposed upon other moneyed capital which is taxed at its real value. As suggested by counsel, also, this objection, if it exists, might be easily removed by providing that the shares in the national banks shall be assessed at their value, never, however, above par. But this is an objection which does not arise in the present case. This is an equitable action in the nature of an action for money had and received, brought against the state to recover back money paid for taxes upon the shares in the Pirst National Bank of Madison. In such a case the plaintiff must show that he is entitled in equity to recover back the money demanded. It is not enough to show that the proceedings to levy and collect the taxes were technically defective at law. The complaint does not allege that the shares in this bank were worth loss than par. Neither does it allege that the assessment upon the shares was at a greater rate than was assessed upon other moneyed capital in the hands of individuals. In the absence of such averments, the court cannot presume such facts to have existed, but must presume the contrary. The complaint, therefore, in this respect, fails to state a cause of action.
As to the act being in conflict with the clause in our state constitution, prescribing a uniform rule of taxation, I have only this to say: that it is provided by the constitution of [668]*668the United States, that that constitution, “ and the laws of the United States made in pursuance thereof, * * * shall be the supreme law of the land, and the judges of every state shall be bound thereby, any thing in the constitution or laws of any state to the contrary notwithstanding.” If congress, in the exercise of its supreme authority, has prescribed a rule or mode of taxation differing from that prescribed by the constitution of any state, the legislature of the state must be governed by the rule prescribed by congress, instead of that fixed by the constitution of the state. See County Treasurer v. Webb and Harrison, 11 Minn. 506. I think, also, that there is great force in the argument of counsel, that the provision of our state constitution is inapplicable to this new species of property, which has been called into existence by the superior power of the federal government.
In my judgment, the demurrer to the complaint should be sustained.
By the Court. — Demurrer sustained.
Paute, J., did not sit in this case, having been of counsel.
The plaintiff moved for a rehearing, on the ground (among others), that the decision of the court did not dispose of all the questions raised by the pleadings, and upon which a decision would b.e desired on error to the supreme court of the United States. The motion was denied.