215 U.S.

341
30 S.Ct. 152
54 L.Ed. 223

FIRST NATIONAL BANK OF ESTHERVILLE, IOWA, E. B.

Mr. Charles A. Clark for plaintiffs in error.

This was an appeal under 1373 of the Code of Iowa, from the action of the
members of the city council of the city of Estherville, Iowa, sitting as a board of
equalization and review, in fixing the assessed value of the shares of stock in
the plaintiff bank for the year 1906. The shares of stock in the plaintiff bank
were assessed by the assessor on the basis of the book or assessed value,
obtained by adding the capital, surplus, and undivided profits of the bank, and
dividing the sum total by the number of shares of capital stock, to ascertain the
value of one share, a proper deduction having been made on account of real
estate owned by the bank. The board of review and equalization raised the
assessed valuation of the shares to $130 per share. The bank and its
shareholders appeared before the board, and objected to its action and to the
valuation fixed by them as being in excess of the actual value, and exorbitant
and unjust. The bank contended that the stock was not assessed and valued in
proportion to other like personal property in the city of Estherville, but was
grossly in excess thereof, and constituted unfair and unequal taxation, and that
the taxable value of the shares of the stock in the bank should be found as the

assessor had previously found it. But the board adhering to its own judgment,
plaintiffs perfected an appeal to the district court of Emmett County, Iowa. In
that court plaintiffs filed a pleading containing taining a recital of the facts and
demanding relief, and reiterating the same contention as made below, and the
same claim as to the proper manner to arrive at the assessable valuation of said
shares of stock. Answer was filed in behalf of the board, wherein it was denied
that the assessment, as raised, was unjust, and asserted that the market value
was the proper criterion for valuation, and that the actual and market value of
the stock in question was even greater than that fixed in the raised assessment.
It was also denied that the assessment was unfair as related to the assessment
on other like property.
2

The district court sustained the action of the board of review, whereupon the
case was appealed to the supreme court of Iowa, which affirmed the decree of
the district court. 136 Iowa, 203, 112 N. W. 829. In the supreme court it was
contended for the first time that the action of the board worked a violation of
5219 of the United States Revised Statutes (U. S. Comp. Stat. 1901, p. 3502),
touching upon state taxation of national bank shares. Because of the fact that
such matter was not presented to the board or suggested on the trial in the court
below, the supreme court refused to entertain the question. What the court said
was this:

'In doing so we shall first dispose of a matter of contention brought forward for
the first time in argument in this court. This contention is, through the action of
the defendant board, as complained of, there was worked a violation of 5219
of U. S. Revised Statutes, having to do with the subject of state taxation of
national bank shares. As confessedly such matter was not presented to the
board, or suggested on the trial in the court below, we cannot give
consideration thereto on merits in this court. But this is to follow our repeated
decisions bearing on the subject. Cedar Rapids & M. C. R. Co. v. Cedar Rapids,
106 Iowa, 476, 76 N. W. 728; Farmer's Loan & T. Co. v. Fonda, 114 Iowa, 728,
87 N. W. 724.'
And further:

'On appeal to the district court, the statute (Code, 1373) provides for a hearing
as in equity. This, however, is not to be construed as clothing the court with
jurisdiction to sit as an assessing tribunal. Frost v. Board of Review, 114 Iowa,
103, 86 N. W. 213; Farmers' Loan & T. Co. v. Fonda, supra.'

We are met at the threshold by a motion to dismiss for want of jurisdiction. It

was ruled in Tyler v. Registration Ct. Judges, 179 U. S. 408, 45 L. ed. 252, 21
Sup. Ct. Rep. 206, that although 'it is true that under the third clause of 709
[of the Revised Statutes], U. S. Comp. Stat. 1901, p. 575, where a title, right,
privilege, or immunity is claimed under Federal law, such title, etc., must be
'specially set up or claimed,' and that no such provision is made as to cases
within the second clause, involving the constitutionality of state statutes or
authorities, but it is none the less true that the authority of such statute must 'be
drawn in question' by someone who has been affected by the decision of a state
court in favor of its validity, and that, in this particular, the three clauses of the
section are practically identical.'
6

In order to give this court jurisdiction of a writ of error to the highest court of a
state in which a decision could be had, it must appear affirmatively that a
Federal question was presented for decision, that its decision was necessary to
the determination of the cause, and that it was actually decided, or that the
judgment rendered could not have been given without deciding it.

The only complaint made before the reviewing board and the district court was
that the assessment was in excess of the actual value of such stock, and
exorbitant and unjust, and that the taxable value thereof should be no greater
sum than is obtained by adding the capital, surplus, and undivided profits of
said bank, subtracting therefrom the amount of the bank's capital invested in
real estate, and dividing the remainder by the number of its shares of capital
stock to obtain the true assessable value of one share of stock; also that 'said
stock is not assessed and valued in proportion to other like personal property in
the city of Estherville, but is grossly in excess thereof, and unfair to these
appellants, and is unequal taxation.' These were not Federal questions. No
mention of the national banking act was made, nor any right or privilege
claimed under it, nor were the provisions of the Revised Statutes invoked, by
name or otherwise. There was no assertion of an issue in the case claiming the
local statutes to be in conflict with, or repugnant to the terms of, 5219 of the
Revised Statutes, or the Constitution of the United States. Plaintiffs filed a
written pleading in the district court, in which they set out all proceedings
leading up to the appeal and the grounds for their complaint against the action
of the equalization board, and when the case went to trial filed an amendment,
alleging the additional grievance of inequality.

Section 1322 of the Iowa Code reads as follows:

'National, State, and Savings Banks.Shares of stock of national banks shall

shall be assessed to such banks and loan and trust companies, and not to the
individual stockholders. At the time the assessment is made, the officers of
national banks shall furnish the assessor with a list of all the stockholders and
the number of shares owned by each, and he shall list to each stockholder,
under the head of corporation stock, the total value of such shares. To aid the
assessor in fixing the value of such shares, the corporation shall furnish him a
verified statement of all the matters provided in the preceding section, which
shall also show, separately, the amount of capital stock, and the surplus and
undivided earnings, and the assessor, from such statement and other
information he can obtain, including any statement furnished to and information
obtained by the auditor of state, which shall be furnished him on request, shall
fix the value of such stock, taking into account the capital, surplus, and
undivided earnings. In arriving at the total value of the shares of stock of such
corporations, the amount of their capital actually invested in real estate owned
by them [and in the shares of stock of corporations owning only the real estate
(inclusive of leasehold interest, if any) on or in which the bank or trust company
is located] shall be deducted from the real value of such shares, and such real
estate shall be assessed as other real estate, and the property of such
corporations shall not be otherwise assessed.'
10

But the court held that the assessor need not rely entirely upon the statements
which the bank is required by the section to furnish, but might take into
consideration other information he might obtain, and, construing that section in
connection with 1305 of the Code, reading, 'All property subject to taxation
shall be valued at its actual value. . . . Such assessed value shall . . . be taken
and considered as the taxable value of such property, . . . upon which the levy
shall be made. Actual value of property, as used in this chapter, shall mean its
value in the market in the ordinary course of trade,' found that the shares should
be assessed at their market or sale values; and then the court proceeded to
ascertain, on the facts, whether the shares were taxed at more than their market
value, and whether at a greater rate in proportion to the value of other like
personal property.

11

If plaintiffs in error believed that the local statute was unconstitutional and
invalid because of conflict with the Federal Constitution or statute, they could
and should have said so; but the validity of the act was nowhere specifically
drawn in question.

12

Writ of error dismissed.