The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1869-02-04
UNITED STATES SUPREME COURT.

THO Authority OF the States Over Local Corr
porations--Tne Power TO Tax Non-Ifesideut
Shareholders-validity Of Such Tax Under
tho Federal Constitution.
j. D. Page Treasurer or Vermont, Us. T. Bdhe.-
This action brought to restrain the treasurer OF
the Vermont and Canada Railroad Company rom
paying and the Treasurer OF the State OF Vermont
from collecting a State tax OF one per cent upon
stocks OF the company held by the petitioner IN
1854 the Legislature OF Vermont passed an act re-
quirng the treasurers Of all railroad corporations
within the state to pay annually into the Treasury
OF the State tax OF per cent on all the Shares
held IN such corporations by persons resldns "iti-
out the State whenever such corporations pay an an
nual profit OF six per cent or more. In 1861 the
Vermont and Canada road, by its profits came
within the provisions OF this law, and an at
tempt being made TO collect the tax on the
stock OF the petitioner, he being non resident this
action was brought to enjoin the proceeding. on
the trial OF the cause the Circuit Court for the
district OF Vermont Judge Smalley held the law
authorizing the to be repugnant to the constu-
ton of the United States and invalid as to the petl-
toner and to all other citizens OF the United states
who are non-residents OF Vermont and stockholders
In corporations therein From that decree appeal
was taken to this court where 1t IS maintained That
that provision OF the constitution which says that
the citizens OF each State shall be entitled to all the
privileges and nmun'ties OF citizens in tie several
Statesh does not prohibit the tax IN question: Inc
construction OF this provision as held below, con-
POUNDS the word scilizenSn with the word 'reSi-
dents and claims for the citizens OF any one State
all the privileges and immunitles OF the residents IN
his and every other State. such construction y
unauthorized and impractcabe. IL Is the citizens
privilege to at elections but 1t Is not trne that
citizen or any state mas the right 10 exercise
this privilege each OF tile several States OF the
Union at the same time and because the laws OF
tie resident ,a citizens It IS not true, them
that when State allows o privilege only
70 resident, and forblds it 70 al oaler J,
the constitution. The law allows the priv
ege TO the resident and not 70 the citizen OF the
be claimed by cit zens OF other States lor fney GER
tany cannot claim more privileges than the citizens
construction OF this provision Of the constitution IS
that state by its legislation shall forbid to the ct
which it allows to its own. But 1T Is equally clear
that State is by any provision compelled 70 grant
or allow to the citizen OF another state what IL Tor
bids to lis own. Every State may grant 10 us own
citizens whatever privileges or immunitiesi It thinks
to be enjoyed by the citizens OF the other states on
the same conditions and under the same circum-
residents, makes no distinction between the citizens
OF the States Taxing higher the property IN State
uroperty belonging to resident makes no distinc-
ton between the citizens Of the diHerent
States IL subjects that species vn Of ct prop
as to the citizens OF other States, often some dts
eliminating tax unless they are residents and y
residents. The tax complained oil IN TINS case 10
laid that part OF the capital stock OF when non-
residents are holdcrs but 1t is precisely the same on
citizens OF Vermont as on the citizens OF other
States. 1t reaches all who are non-resdents and IT
reaches none who are residents OF Whatever State
they are citizens. The appellee contends that the
shares OF nonresident stakeholder in this corpora
ton cannot taxed by the State, because the state
has no Jurisdiction over the person OF the holder ana
none over his property, for the property Is just as
much away from the State as the person is ana
precisely as the property OF non res dent creator,
In the debts due him from resident, Is beyond the
power control Of the State where the uebor re-
sides. The property 10 mere right OF the creditor
or ha ana 90 rg senarate from the per
son to whom 1t belongs is impossible. The oDga-
lion or duty corresponding to the right does anu
must exist elsewhere Tor treSdes IN announcer oelng
1t iB to this view to say that TINS corpora
3 ton. being the creature OF State law, state law
may therefore impose upon the persons having pro-
pcrty in IL such burdens and eXacuOnS as the
terfere with the private property Of the shareholder
reserved to the state IN the charter, put on tne
contrary 1t was provided tnat the shares should be
personal property, and no limitation was made as 70
who or what class or persons should own them, and
under these provisions the stock was taken and De-
came the Individual property OF the shareholders,
after which, upon settled principles the state could
not rccede from alter its contract or change the
nature impair the value OF the property which IL
had permitted persons acquire In the corporation.
Besides, 1. the prnciDle claimed were conceded 1t
coniscate, its will and pleasure, the whole
property which o corporation had acquired under
Its statutory creation, and thus destroy, by mere
arbitrary edlct not only the franchises and privi-
leges which 1t had conferred upon the corporation,
but all the property OF private persons which had
been invested In It's operations. The late Jacob Col
lamer who was formerly counsel IN this case, nam
now represented by ex-senator Poland TOR appellant
and Senator Edmund5 for appellee.