Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1873-03-27
TAX DECISION.

Dora9lona whose charters FRO.
Vide that u Certatn LaA sheil DC IN
smps rem County aud cisy A..
nsasment = Corporetions Wnese
chareers have not this hpecini
PTovision are Liable for County
and City Taxes.
In the Second Chaneery Court today
Chancellor Walker delivered IN elabO-
rate and exhaustive opinion on the Bank
and Insurance company agreed cases as
to the liability OF such institutions for
county and city taxes. The Chan
cellor referred TO the approaching
term Of the Supreme Court, and
the fact that these cases would be car
ried there on appeal. The question
involved arises in the charters, which all
contain some provision as TO the taxa
ton to be imposed upon the companies
respectively. In the Union and Plant
ers' Bank charter il is provided that said
company shall pay the State an annual
tax Of one.half Of one per cent. on each
share of the capital stock subscribed,
"srhich shall be ia lieu Of other fares.
In other companies the charter merely
declares that certain tax shall be paid.
The revenue act of 1870 provides that
all shares Of stock in any bank, now or
heretofore incorporated by and in pur-
suance Of any law of the State, shall be
valued and assessed, but subject to taxa
ton" Under this act the State, county
and city undertake TO assess and tax the
stockholders of said companies. The
Chancellor reviewed at length the argu-
ments made on either side Of the ques-
ton. The Chancellor proceeded to state
as follows;
think the exemption clauses of the
charters constitutional There is scarcely
a Constitution Of State that does not
substantially contain the principles that
taxation shall be equal and uniiormi
vet in the Supreme Court of the United
States the validity and irrepealability OF
such clauses of charters have been up
held. 1t has been uniformly held that
State Legislatures, unless prohibited
IN terms by State Constitutions, may
contract by legislation to release the ex-
ercise of taxing a particular thing, cor
poration or person.
The Chancellor cited numerous au-
thorities in support Of the above propo-
sition. As to the effect Of the various
clauses of the charters, the Chancellor
held:
In those cases in which the charter
fixes tax in lieu of all other taxes,
neither the company, its property nor
its shareholders can be further taxed;
but those charters which say that
the company shall pay only GER
tain tax, afford no exemption from the
general taxing power of the State. The
clauses Of express exemption protect
the company, its franchises and capital
stock, and it must be held, also, that
they forbid the taxing Of the sharehold-
ers. The shareholders, however, in those
companies, whose charters contain no
provision that the prescribed taxes
should be received, in llieu of all other
taxes, are liable to the taxes sought to
be imposed upon them.
Chancellor Walker concluded as fol-
loWsi
Nothing can be more certain in legal
decisions than that the privileges and
franchises Of private corporation
may be taxed by a State for the
support of State Government.
The charter Of bank is a franchise
which is not taxable as such if price
has been paid for it, 1t has been held
that the specification of certain tax in
the charter Of bank Of itself exempts
only the franchise Iom further tax. To
exempt its property or shareholders,
there must be further declaration to
that effect, and this upon the principle
that the SUN named Is the stipulated
price OF the franchise.
The Chancellor ordered judgment to
be entered in the various cases accord
ing to the above opinion.