Ex Parte Bransford

Citations: 310 U.S. 354; 60 S. Ct. 947; 84 L. Ed. 1249; 1940 U.S. LEXIS 592

Court: Supreme Court of the United States; May 20, 1940; Federal Supreme Court; Federal Appellate Court

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The county treasurer and ex-officio tax collector of Pima County, Arizona, is seeking a writ of mandamus to compel District Judge Ling to convene a three-judge panel to hear a case brought by Valley National Bank. The Bank is seeking both an interlocutory and permanent injunction against the collection of certain taxes by the counties. The petitioner argues that under Section 266 of the Judicial Code, he is entitled to a three-judge hearing. The case involves the taxation of bank shares, which are assessed by county assessors, appealed first to county boards, and then to a state board of equalization, before final assessment and collection by the county treasurer.

In 1935, the state board mandated that bank shares be valued at 75% of their capital stock, surplus, and undivided profits, ignoring other liabilities. The Bank, which operates in multiple counties, calculated its taxable value at $524,629.50, allocating $139,088.80 to Pima County based on its assets. The Pima County assessor, however, assessed the property at $327,590. The Bank paid the assessed amount but reserved the right to challenge the validity of the assessment. After threats of enforcement from the county treasurer, the Bank filed for an injunction, arguing multiple grounds which the court found insufficient to necessitate a three-judge panel.

The assessment of the Bank's real estate and personal property in Pima County raises questions about its validity, as the Bank argues it is unclear whether the assessment reflects the value of the property, the common stock alone, or the combined value of common and preferred stock. The Bank contends that the assessment is void under Arizona statutes. Specifically, if preferred stock is included in the valuation, it violates an exemption for such stock owned by the Reconstruction Finance Corporation established in the Act of March 20, 1936. If the assessment is based solely on common stock, it is challenged on two grounds: first, that it significantly exceeds the actual value, making it confiscatory, and second, that it is discriminatory compared to other banks, where common stock is assessed at 75% of its value and other assets at 60%, while this assessment is nearly double the actual values.

The Bank claims this excessive and discriminatory valuation violates federal law under R.S. 5219, which restricts the taxation of national bank shares to levels comparable to other individual moneyed capital. The Bank seeks an injunction against these assessments, arguing they contravene both federal and state laws. However, the document notes that under Judicial Code Section 266, an injunction must be based on the unconstitutionality of the state statute, which does not apply to the Bank's claims about unauthorized assessments under state law or the valuation issues concerning federal exemptions. The focus is on the method of taxation rather than the constitutionality of the statute itself. Previous cases, such as Ex parte Buder and Lemke v. Farmers Grain Company, have established that variations in property valuations do not inherently challenge the constitutionality of the underlying statute but rather question the actions of the officials executing the assessment. Thus, claims of confiscation and discrimination relate to excessive valuations rather than the validity of the statute.

The petitioner argues that the last sentence of Section 3071 imposes an excessive and discriminatory assessment on banks operating in multiple jurisdictions. This provision states that the assessed value of a bank's capital stock must be apportioned among the counties, cities, or towns where it operates, ensuring that each jurisdiction receives an amount not less than the actual cash value of the bank's real and personal property located there. The petitioner claims that interpreting this provision as requiring apportionment based solely on tangible property could lead to a total valuation exceeding the assessed stock value. It further contends that this could result in a disproportionate assessment per share, particularly if only common shares are considered for valuation while disregarding preferred shares.

The petitioner asserts that such a valuation method discriminates against common shares in violation of the federal Constitution, thus rendering the statute unconstitutional. In contrast, the Bank argues that the assessor misunderstood the statute, claiming that the assessment wrongly attributes the entirety of the valuation to common shares instead of appropriately apportioning it between common and preferred shares.

The court clarifies that it is not currently deciding the interpretation of the Arizona tax statutes. It notes that if the trial court finds the assessment aligns with the statutes and determines that the assessment should be prorated among common shares, it will only involve statutory construction. The distinction is made between a petition challenging the constitutionality of a statute as applied, which necessitates a three-judge court, and one contesting an administrative action without questioning the statute's constitutionality, which does not require such a court.

If the complainant does not challenge the statute's constitutionality, this implies its validity for the case. A trial court's finding that the assessment is consistent with the statute would lead to the dismissal of the bill. Jurisdiction may be lost by the special court if it lacks necessary prerequisites, such as relief against state officers. Section 266 applies only when actions are directly linked to the statute, and there is no indication that Congress intended for all constitutional challenges to state statutes to be decided by a three-judge court. The discussion concludes with the denial of the motion to file the petition for mandamus, rendering other arguments for refusal by the Bank unnecessary for consideration.

The motion has been denied, referencing multiple legal precedents and statutory provisions. Notable cases cited include Ex parte Williams and Stratton v. St. Louis Southwestern Ry. Co., which establish relevant legal principles. Additionally, the Revised Code of Arizona (1928) sections 3069-3111 are mentioned, along with federal statutes such as 49 Stat. 1185 and 12 U.S.C.A. 51d-51f. The supremacy of the U.S. Constitution and federal laws is affirmed, as stated in Article VI, Clause 2. Other cases referenced include Pittman v. Home Owners' Loan Corp. and Owensboro Nat. Bank v. Owensboro, among others, indicating a comprehensive review of both statutory and case law relevant to the motion's outcome. The summary captures the essence of the legal decisions and statutory references that informed the denial of the motion.