The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1895-05-14
BOARD OF COMMISSIONERS OF
DURHAM COUNTY VS.. BLACK
WELL DURHAM TO-
BACCO CO.
SUPREME COURT OF NORTH CAROLINA,
April 9, 1895.
TAXATION CAPITAL STOCK.

W. $4SW 4AN
Tor q tax on capital stock of corpora
tlons, and that the amount of the az
sessed value of its real and persona
property listed for taxation shall b
deducted from the market value of th
aggregate shares of the company, AM
he difference taxed as capital stock
Held, that the fact that the corpora
tlon lists for taxation the shares of it
individual shareholders, as required BY
section IA, or that it owns real and per
sonal property not listed because loca
ted out of the State, valued in the
the amount of the difference between
the assessed value of it's real and per
sonal property and the actual value OF
its aggregate shares, does not relieve
it from liability to taxation on such
difference as capital stock.
Appeal from Superior Court, Dur
ham county. Hoke, Judge.
Controversy without action between
the Board of Commissioners of Dur
ham county and the Blackwell Durham
Tobacco Company to obtain a Judicial
decision. From a judgment for de
fendant, plaintiff appeals. Reversed.
J. S. Manning for plaintiff. W. A.
Guthrie and Fuller, Winston & Fuller
for defendant.
Clark, 1.-THE Act of 1893 (ch. 296,
par. 39) provides that all corporations
therein named, in addition to the
other property required by this act TO
be listed, " shall pay a tax on it's cap
ital stock. As the mode of ascertain
ing the amount which shall be taxed
as capital stock, s~ub-sections 8, 4, 5
provides that the market value, or if
no market value, the actual value, of
the aggregate shares of the, company
shall be taken as a basis. and from that
sum the amount of the assessed value
OF it's real and personal property listed
for taxation shall be deducted, and
the difference, if any, shall be taxed
asLG6pital stock. 1t is stated in the
lease agreed" that the actual value of
the aggregate shares of stock of the
defendant corporation is $809, S34, and
that the assessed value of it's real and
personal property is $500 3347 Upon
the plain, explicit provision of the
statute the defendant is liable to tax
upon the difference, $500, 600, as the
taxable part of its capital stock. It is
true, the case agreed sets out that the
defendant has $500, 900 of personal and
real property which is not listed for
taxation in this State, because located
in Pennsylvania. But that has moth
ing to do with the taxation of the cap
ital stock, the whole of which, without
any deduction, the legislature might,
in it's discretion, have taxed here, in
addition to the tax upon the real and
personal property. 1t is a legislative
concession to deduct from the capital
stock the amount of real and personal
property which pays tax.
It also appears that the total capital
stock is $4,000, 900. If, as the defen
dant contends, tax is to bepaid on only
$500, 600, this would be to pay tax on
barely one eighth of the sum at which
the property is capitalized. 1t would
seem from the case agreed that this
capital stock is by agreement of counsel
valued at 1903, 1874, which is about one
fifth of the nominal capital. and is the
exact value of the real and personal
property, because the stock has no
market value" If so, it is a miscon-
ception of the statute applicable to the
valuation of the capital stock under
this act, and is important enough not
to pass unnoticed. Shares may have
no market value because too valuable
to put on the market, or because the
owners do not wish to part with it, or
for many other reasons. While the
value of the capital stock cannot be
less than the value of the aggregate of
the real and personal property held by
the corporation, unless the latter is in
debt, the good will of the business or
trade mark and the rate of dividend
will ordinarily make the capital stock
more valuably than the mere aggregate
of the real and personal property owned
by the company. In any corporation,
reasonable prosperous, the capital
stock is worth much more than the
bare real and personal property,
which is the value of the dead body,
SO to speak, of the corporation, should
it cease to live and m3ve. AS to cor
p~orations, by all the authorities, it is
in the power of the legislature to lay
the following taxes, two or more
of them, in it's discretion, at the same
time. ~ To taY The franchise lin