Statement of the case. judge proper, among all the ordinary depositors, in proportion to the amount of their deposits." No money was received on deposit or held otherwise than upon the terms and conditions thus set forth in the prospectus and agreement. No accounts had ever been opened or moneys received subject to payment on draft, check, or order. When a deposit was made a pass-book was given to the depositor, and an entry of the deposit made in it and in the books of the bank. When the money was drawn the depositor presented his pass-book, received his money and signed a receipt for it in the books of the bank, and an entry was made in the passbook. When the depositor could not appear in person to receive his money, he sent an order with the pass-book, and on the production of the pass-book and order the order was taken as a receipt and pasted in the receipt book in the place of the receipt, and the entry made in the pass-book. No such order was ever paid without a presentation of the passbook with the order. In practice, although not obliged to do so, the company always intended to keep sufficient money on hand to meet all ordinary calls when made, and it always paid upon call, so long as there was money to do so. There had been one or two occasions when there was a heavy demand for money, and when it had not been able to meet on call all ordinary demands. Loans were usually made ou real estate. This was the company's regular mode and business; but when unable to put all the deposits out on real estate, it lent them on other securities, such as mint certificates, bonds of the United States, State bonds, Oakland, San Francisco, and other bonds, San Francisco Gas Company and Spring Valley Water Works Company's stocks. But this was not the regular business of the company, and such loans were but temporary. The company did not lend on bills of exchange, or promissory notes without mortgages, and did not pay out money on drafts or checks. It issued certificates for "term deposits" not transferable, but the certificates were issued subject to the foregoing agreement. The certificate when made out was cut from a correspond Argument for the collector. ing stump, and before delivery the party receiving it signed the receipt upon the stump, showing that it was received subject to the conditions of the said agreement upon which deposits were received. As conclusions of law, the court found: 1st. That the company received no deposits of money subject to payment by check or draft, or represented by certifi cates of deposits, or otherwise, payable on demand, or at some future day, within the meaning of the revenue acts of the United States. 2d. That the moneys deposited with it were not subject to the tax assessed thereon and collected by the defendant. 3d. That the plaintiff was entitled to recover. Judgment being entered accordingly in favor of the company, the collector brought the case here. Mr. G. H. Williams, Attorney-General, and Mr. C. H. Hill, Assistant Attorney-General, for the plaintiff in error : 1. As this bank had a capital stock of $100,000, it does not fall within the proviso of the act of July 13th, 1866, exempting certain savings banks from taxation. In the Bank for Savings v. The Collector* (a case which, though on a former statute, covers the principle of the present one), this court held that, independently of some proviso exempting it, a savings bank, though without any capital and without shareholders or corporators, interested in it or entitled to participate in its profits, was liable to taxation as "a bank." A fortiori, a savings bank with a capital stock falls within the rule; and the proviso by expressly excluding from the operation of the body of the section, savings banks with no capital stock, shows that savings banks having a capital stock fall. within it. 2. As the bank set aside nearly 10 per cent. of the net profits for the stockholders, who furnished the capital, it did other business than receiving deposits "to be loaned or invested for the sole benefit of the parties making such de Argument for the savings institution. posits without profit or compensation to the association or company." It was in fact carried on as much for the profit and benefit of the stockholders as of the depositors. Indeed if the company had large deposits and did much business, it would have been carried on much more so. 3. The deposits made in this bank were deposits "subject to payment by check or draft, or represented by certificate of deposit or otherwise," within the meaning of the statute. The entry in the pass-book was a "certificate of deposit." If not, the deposit was represented by it, otherwise than by such certificate. Messrs. J. R. Jardoe and C. E. Whitehead, contra: 1. The intention of Congress was to impose a tax upon capital engaged in what is commonly known as "banking." No interest is paid by ordinary banks on moneys deposited with them. All the profits belong to the bank. Interest, however, is paid in savings banks to their depositors. Ordinary banks make vast profits from their deposits; because, unlike savings societies, they pay nothing for the use of them. Therefore, the act to tax bank capital provides a tax upon all such deposits as were represented in the hands of the depositors by certain designated certificates, "or otherwise," meaning by any other means which could possibly make the depositor a holder or user, or give him credit upon the moneys which were deposited with the bank. Ordinary banks derive great profits from them, and to such banks, the only ones that do make great profits, the provision should be confined. 2. This company was not a bank, nor engaged in the business of banking within the meaning of the act. To render a company liable as a bank it must be a corporation engaged in the business of banking, and holding deposits subject to payment by check, draft, or otherwise. This society received deposits which it lent out for the benefit of the depositors, giving the depositors all the net profits. These deposits were in nowise payable to the depositors by the bank, except when the loan should be pâid Argument for the savings institution. in by the person to whom it might be lent. The bank had neither circulation, checks, drafts, certificates of deposit, or exchange. It was simply a trustee to invest. Such institutions have been decided not to be banks in legal language.* The provisions of contracts between these saving institutions and their depositors have been held to be strictly enforceable even to their smallest detail.† It is clear, therefore, from the provisions of these contracts that no depositor could ever maintain an action for debt or in assumpsit upon these contracts; nor has he any money with either of these banks which is ex necessitate payable at any time either on check, draft or order, or is represented by certificate of deposit, or otherwise. These banks, therefore, occupy an anomalous position, and one clearly not contemplated by the revenue act. In them the depositors receive the profits and bear the risks of the business, and in so doing occupy a position different from that held by any other class of persons known to the law. If A. deposit with a bank of California, his claim is good whether the bank wins or loses by its management of his funds; but if he deposits with a company like this one, he has no claim for recovery if the company shall lose its money by untoward circumstances, national bankruptcy, or any cause that may produce a fall in commercial values. Thus the Bank of Savings v. Collector, cited by opposing counsel, is not in poiut. The plaintiff in that case, could be called on to make payments on four stated days in the year, and therefore four times in each year an action at law would lie against it; it therefore held money payable at some future time, and its funds were repayable on draft. The case was put by the court on the very point of obligation of repayment.§ Our banks, as we have seen, hold no funds payable by draft, or otherwise, and none of which it can absolutely be predicated that they will ever be repaid. * State of Louisiana v. The Louisiana Savings Co., 12 Louisiana Annual, 572. Wall. Provident Institution for Savings, 3 Allen, 96; S. C., 6 Allen, 321; Warhus v. Bowery Savings Bank, 5 Duer, €7; S. C., 21 New York, 546. See page 497. ? See page 512. Opinion of the court. Again; it would seem plain that the general enactment in section 110 does not impose a tax upon this society. Reliance has to be had on the proviso in the same section. But when you resort to the proviso you can impose the tax only by implication. Now you cannot lawfully so impose a tax. A proviso does not enlarge the powers of a statute,* and any man who will bring an action for a penalty under an act of Parliament must show that he is entitled thereto under the enactory clauses.† If a statute imposed a tax on all dwelling-houses and stores, and if a proviso exempted all manufactories where steam was used, this would not make manufactories where steam was not used liable, nor indeed make anything liable except what the statute declared should be liable. Mr. Justice CLIFFORD delivered the opinion of the court. Associations engaged in moneyed transactions, whether incorporated or not, having a place of business where credits are opened by the deposit or collection of money or currency, subject to be paid or remitted upon draft, check, or order; or where money is advanced or loaned on stocks, bonds, bullion, bills of exchange, or promissory notes; or where stock, bonds, bullion, bills of exchange, or promissory notes are received for discount or for sale, are regarded as banks, subject to taxation, under the internal revenue laws which were in operation when the taxes in controversy in the present suit were assessed and collected; but the same section which created the liability and authorized the assessment of the taxes, also provided that savings banks, having no capital stock and doing no other business than receiv ing deposits to be loaned or invested for the sole benefit of the parties making such deposits, without profit or compensation to the association or company, shall be exempt from tax on so much of their deposits as they have invested in securities of the United States, and on all deposits less * Dwarris on Statutes, 515; Sedgwick on Statutory Law, 62. |