The National City Bank of New York is organized under the National Banking Act, as amended from time to time since its enactment. In 1930 the bank, after complying with the requirements of section 25 of the Federal Reserve Act of December 23, 1913, c. 6, 38 Stat. 251, 273, as amended September 7, 1916, c. 461, 39 Stat. 752, 755 (12 U.S.C.A. § 601), infra, established branches at Manila and Cebu in the Philippine Islands. A tax was levied by and paid to the Philippine government on the net income of these branches for the first six months of the year 1931 (R.S. § 5219, as amended (12 U.S.C.A. § 548)), about which there is no controversy. The Philippine government, however, in addition, levied capital and deposit taxes not permitted by section 5219, and, these having been paid by the bank under protest, this action was brought in the Court of First Instance of Manila to recover the amount. That court gave judgment in favor of the bank for only a part of the additional taxes; but the Philippine Supreme Court, upon appeal, reversed the judgment in so far as it was against the bank, and ordered a refund of the entire amount.
Section 25 of the Federal Reserve Act of 1913, supra, reproduced in the margin so far as it is pertinent here, authorizes the establishment of branches of national-banking associations 'in foreign countries or dependencies of the United States.' It cannot be doubted that, viewing this section without regard to later legislation, the branches here in question were lawfully established; for, as will appear at a later point in this opinion, the Philippine Islands are included by the words 'dependencies of the United States.' In that view of the matter, the additional taxes imposed by the Philippine government are invalid under Domenech v. National City Bank, 29 U.S. 199, 204, 55 S.Ct. 366, 79 L.Ed. 857; Talbott v. Silver Bow County, 139 U.S. 438, 11 S.Ct. 594, 35 L.Ed. 210, and, were it not for the asserted effect of legislation subsequent to the passage of the Federal Reserve Act in 1913, which we shall examine in a moment, this case would be disposed of, without further detail, upon the authority of those cases. In the Domenech Case we held that the national-banking laws extended to Puerto Rico; that a tax on a branch of a national bank is a tax on the bank; and that Puerto Rico, being a dependency of the United States, could not, except as permitted by R.S. § 5219, tax a national bank, since it is an agency of the United States. The Talbott Case involved the power of a territory to impose a tax upon a national bank. This court held, in the first place, that the same power of taxation in respect of national banks exists in the territories as in the states; and, in the second place, that this power of taxation in the territories was limited by the provisions of section 5219 although in terms that section refers only to the states. 294 U.S. 199, 204, 55 S.Ct. 366, 369, 79 L.Ed. 857. We find nothing in the original Organic Act or in any of the early statutes relating to the Philippines referred to by petitioner which take those islands out of the controlling rule of the Domenech Case that a 'dependency may not tax its sovereign'; and we come to the only remaining point which we deem it necessary to discuss.
Petitioner contends that subsequent legislation has the effect of repealing and abrogating section 25 of the 1913 act, permitting the establishment of national bank branches, in so far as the Philippine Islands are concerned. This later legislation consists of certain provisions in the Organic Act for the Philippine Islands of August 29, 1916, c. 416, 39 Stat. 545, and the Act of September 7, 1916, supra, amending designated sections of the original Federal Reserve Act.
We examine these statutory provisions in their chronological order. By section 25 of the 1913 act, as we have seen, national banks were authorized to establish branches in the Philippine Islands. The Organic Act of 1916 provides:
'Sec. 5. That the statutory laws of the United States hereafter enacted (subsequent to August 29, 1916), shall not apply to the Philippine Islands, except when they specifically so provide, or it is so provided in this Act (chapter).