FRANKENTHALER, J. [1,2] The undoubted right of defendant Harry Lerner to use his own name in connection with the conduct of his business is subject to the limitation that he refrain from conduct calculated to mislead the public into confusing his business with that conducted by plaintiff. The emphasis on the surname "Lerner," and the use of type strikingly similar to that used in some of plaintiff's stores, both seem to substantiate the charge that defendant is endeavoring to obtain the benefit of the reputation and good will built up by the plaintiff. His statement that at the time he opened his store, about three months ago, he was not aware that plaintiff had any stores in Brooklyn, seems somewhat strange, in view of the extent of plaintiff's reputation and the fact that defendant is engaged in the very same business, and would be likely to know of large competitors.

Defendant cannot be injured in his newly opened store by being required to take steps to obviate deception and call to the attention of the public the lack of connection between his establishment and those operated by the plaintiff. He will therefore be enjoined from operating the store under the name of "Lerner," unless his first name is prefixed thereto, and a different type of lettering used from that employed by plaintiff.

The motion is therefore granted to the extent indicated. Bond, $2,000. Settle order.

(130 Misc. Rep. 352)

CLARK, County Treasurer, v. FIRST NAT. BANK OF MORRISVILLE. Supreme Court, Madison County. September 3, 1927.

1. Taxation 10-State's power to levy tax affecting national bank is limited by United States statute, and acts beyond such limits are void (12 USCA § 548).

Rev. St. U. S. § 5219 (12 USCA § 548), providing that all shares of national banks may be included in valuation of personal property of owner or holder in assessing taxes imposed by state within which bank is located, circumscribes and limits power of state to levy any tax affecting national bank, and any attempt by state or one assuming to act under its laws to go beyond statutory limits is void.

2. Banks and banking 233-National banks are subject to paramount authority of United States, and attempted control by state, conflicting with United States laws, is void.

National banks are instrumentalities of federal government, created for public purpose, and necessarily subject to paramount authority of For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(224 N.Y.S.)

United States, and any attempt by state to control their conduct is void, when it expressly conflicts with laws of the United States.

3. Taxation 10-State cannot tax national banks in any manner except for permissive legislation of Congress.

States are wholly without power to levy any tax, either direct or indirect, on national banks, their property, assets, and franchises, except for permissive legislation of Congress.

4. Taxation 10-Personal property belonging to national banks is exempt from direct assessment and taxation by states (12 USCA § 548).

Rev. St. U. S. § 5219 (12 USCA § 548), providing that all shares of national banks may be included in valuation of personal property of owner or holder in assessing taxes imposed by state within which bank is located, in effect exempts personal property belonging to bank from direct assessment and taxation by states.

5. Taxation 11-Whether state law violates federal law authorizing taxation of national bank shares as personal property of owner depends on whether tax otherwise affects bank (12 USCA § 548).

Under Rev. St. U. S. § 5219 (12 USCA § 548), providing that all shares of national banks may be included in valuation of personal property of owner or holder in assessing taxes imposed by state within which bank is located, test whether state law violates statute is whether it assumes to assess any tax affecting bank aside from real estate tax and assessment of stock of stockholders to be collected of them.

6. Taxation 11-United States statute, providing for inclusion of shares of national bank in personal property of owner, subject to tax, does not invalidate state laws making bank agent of stockholders to collect tax (12 USCA § 548).

Rev. St. U. S. § 5219 (12 USCA § 548), providing that all shares of national banks may be included in valuation of personal property of owner or holder in assessing taxes imposed by state within which bank is located, does not invalidate state laws which make bank agent of stockholders to collect tax.

7. Taxation 11-Assessment of state tax on shares of national bank as whole against bank as agent for stockholders held proper as tax on owners of shares; "each" (Tax Law, § 23, as amended by Laws 1917, c. 153; § 24; §§ 24-b, 24-d, 24-f, as added by Laws 1916, c. 323; 12 USCA § 548).

Under Tax Law, § 23, as amended by Laws 1917, c. 153; section 24; sections 24-b, 24-d, 24-f, as added by Laws 1916, c. 323, taxing shares of national banks, requiring bank to furnish assessors with list of stockholders and requiring supervisors to state value of each share of stock taxable, word "each" does not impliedly call for separate and detailed assessment of stock of each stockholder, and assessment on shares as a whole on bank as agent of stockholders was proper as tax against owners of shares, not on bank, and was not in violation of Rev. St. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

U. S. § 5219 (12 USCA § 548), providing for inclusion of shares of national bank in valuation of personal property of owner in assessing

state taxes.

[Ed. Note. For other definitions, see Words and Phrases, First and Second Series, Each.]

Action by Robert L. Clark, as County Treasurer of Madison County, against the First National Bank of Morrisville, to recover $854.59 and interest assessed in 1924 as an omitted tax for the year 1923 against the shares of defendant's stock held by its stockholders. Judgment for plaintiff.

W. E. Lounsbury, of Oneida, for plaintiff.

J. A. Johnson, of Morrisville, for defendant.

SENN, J. The defendant is and for many years has been a national banking association, duly organized under the laws of the United States governing national banks, located and doing business at Morrisville, in the town of Eaton, Madison county, N. Y.

In the year 1923 the defendant complied with section 23 of the Tax Law (as amended by Laws 1917, c. 153), by furnishing the assessors of the town of Eaton with the statement required by said law, from which it appeared, among other things, that the capital stock of the bank was $50,000 divided into 500 shares of the par value of $100 each and that the surplus and undivided profits were $35,458.50, making a total of $85,458.50. It also included a list of the names and residences of the stockholders, with the number of shares held by each.

Through some inadvertence, this was omitted from the tax roll of the town for that year, and the tax of 1 per cent. upon said shares as provided by section 24-b (added by Laws 1916, c. 323, and amended by Laws 1923, c. 897) was not assessed by the board of supervisors for that year.

In the year 1924 the said tax, amounting to $854.59, was assessed as an omitted assessment of the year 1923, and a notice of the same was mailed to the cashier of the defendant bank pursuant to section 24-d of the Tax Law (added by Laws 1916, c. 323, as amended by Laws 1917, c. 153).

This notice did not separately specify the amount of tax to be charged to each respective stockholder, but stated the aggregate sum, leaving it to the bank to compute the amounts to be collected from each.

The form of the assessment (omitting entries as to how the tax was to be distributed), was as follows:

Towns in which banks are located, Eaton.

(224 N.Y.S.)

Names of banking institutions, First National Bank, Morrisville, N. Y.

Total amount of capital stock, surplus, and undivided profits assessment, $85,458.50.

Total tax levied, $854.59.

In the assessment roll of the town of Eaton for 1923 there was inserted in 1924 and set forth under the title "Bank Assessments" a statement based on the statement furnished by the bank to the assessors, setting forth the name and residence of each stockholder, the number of shares held by each, and the assessed value of each such share, also the grand totals of the shares and their value. But the separate tax assessed was not "extended" or carried out as is done in the regular assessment of real and personal property.

In the warrant to the county treasurer for the collection of this tax, it was given in the aggregate. In one portion of the warrant it is mentioned as "the amount of tax levied by this board upon such banks and banking associations," but later it is referred to as the "shares of bank stock assessable." It also refers to section 24 of the Tax Law and its amendments as being the law under which it is assessed.

The tax has never been paid. Defendant claims that the assessment as made is in form and effect an assessment against the bank and not an assessment of the shares of the stockholders as required by law; that it not only is not required to compute the amounts separately chargeable to the stockholders, but that it has no right to do so; in short that the assessment in solido against the shares of stock as a whole is in violation of the federal and state law, and that therefore it could not legally pay this tax.

There can be no question but that, if this is to be deemed a tax against the bank and its property, it is illegal and cannot be enforced.

Section 5219 of the Revised Statutes of the United States (12 USCA § 548) provides that, subject to certain restrictions, not in question here, all the shares of any association may be included in the valuation of the personal property of the owner or holder of such shares in assessing taxes imposed by authority of the state within which the association is located, and the Legislature of each state may determine and direct the manner and place of taxing all the shares of national banking associations located within the state, and may tax their real property to the same extent, according to its value, as other real property is taxed.

[1] This section circumscribes and limits the power of the state to levy any tax as against or affecting any national bank. Any attempt, whether by the state or any one assuming to act under its laws, to go beyond these limits, is without legal authority, and all acts and determinations in that behalf constitute a legal nullity.

[2] National banks are instrumentalities of the federal government, created for a public purpose, and as such necessarily subject to the paramount authority of the United States. It follows that any attempt by a state to define their duties or control the conduct of their affairs is absolutely void, whenever such attempted exercise of authority expressly conflicts with the laws of the United States. Davies v. Elmira Sav. Bank, 161 U. S. 275, 283, 16 S. Ct. 502, 40 L. Ed. 700.

[3] The respective states would be wholly without power to levy any tax, either direct or indirect, upon the national banks, their property, assets, and franchises, were it not for the permissive legislation of Congress. Owensboro Nat. Bank v. Owensboro, 173 U. S. 664, 667, 668, 19 S. Ct. 537, 43 L. Ed. 850.

Under the authority of section 5219 of the U. S. Rev. Statutes above referred to, the Legislature of this state has from time to time enacted statutes regulating and prescribing the method of assessing and taxing the shares of stock of national banks located in this state. It is not claimed that there is any conflict between these statutes and the laws of the United States. The contention is that the requirements of the state law were not followed in making the assessment, specifically that an assessment of the shares as a whole is not an assessment of the tax to be paid by each shareholder.

The statute, so far as applicable to the question, prescribes that, in assessing the shares of banking associations, the value of each share of stock shall be ascertained and found by adding together the amount of the capital stock, surplus, and undivided profits of such banking association and by dividing the result by the number of outstanding shares. The owners of the stock are not entitled to any deduction on account of personal indebtedness or for any other reason. Section 24, Tax Law. The rate of tax is 1 per centum upon the value. Section 24-b, Id. The board of supervisors shall ascertain from an inspection of the assessment rolls the number of shares of stock of bank association's the names