The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1902-04-14
NO STAMP ON
STOCK PROXIES
SUPREME COURT DECIDES THE
QUESTION IN VAN VAL
KENBERG CASE.
FIRST NATIONAL, BANK MEETING
Is AFFECTED.
Three Opinions by the Justices, Perry
observation-disclosures and Powers Of
Attorney Compared

The Supreme Court this morning
handed down a decision, with three
opinions, in the case Of 1. w. Van VAL
kenberg VS.. Treasurer Wright, an ac-
ton to test the question of whether
stock proxies are taxable under the
Territorial law providing for stamps
on powers of attorneys The case was
taken into court just after the troubles
over the First National Bank meeting,
at which President Brown ruled out a
lot of proxies because they had no fed
eral stamp on them. Later it was dis
covered that the federal law on the
subject had been repealed. The Su
preme Court now decides, by Galbraith
and Frear, Perry dissenting, that the
territorial law does not apply to proxies
and therefore the latter are not subject
to the stamp tax.
The issue was raised regarding
proxy given by Van Valkenberg to E.
r. Paxton, to vote his stock in meet
ings of the b. f. Dillingham; company,
Limited. Treasurer Wright required
that the proxy be stamped, under the
territorial law that has been in force
for many years, taxing powers Of at
torney.
The opinion of the court is by Justice
Galbraith. He refers to decisions de-
claring that where there is doubt as
Ored in constituting law, and to a Ha-
waiian Supreme Court decision stating
that property intended to be taxed
must be definitely named. Under an
act taxing horses, mules could not be
held taxable, under this decision, and
Galbraith says:
There is some resemblance between
a power of attorney and a proxy (pOs-
sibly as much as between a horse and
] rHry,a In, vn-rsfff frae f1 nn
evidence of the authority of the person
named therein to do some specified act
or thing for and in the place of the
person issuing it. With this likeness
! the resemblance disappears as distinct
| ly as the similarity between the horse
and his meek relative They differ not
| only. in the object and purpose for
which they are given but in the for
mality of their execution. The one is
usually executed with the same for
mality as a deed. This difference is
well understood in the business com
munity. No business man of ordinary
| intelligence would speak of giving a
proxy to authorize another to convey
his land. Nor would he think of Civ
! ing a power of attorney to authorize
one to vote his stock in a corporation
meeting. The members of the legisla-
ture that enacted this statute are pre-
y
| intelligence and to have known the well
| understood difference between a proxy
and a power of attorney. That a proxy
was not named in the schedule by
specific and clear language must be
| taken as conclusive evidence of the in
tention of the Legislature not to include
such instrument among the subjects OF
taxation"
In a concurring opinion Chief Justice
10 ooh m loo u
a power of attorney, and that at first
he was inclined to hold that the tan
must be paid. However, proxy is sc
we'll known popularity as different from
a power of attorney that the legisla-
ture, if it had intended to tax proxies
would surely have mentioned them
says Frear, For a quarter of a century
no one has thought of requiring the
stamps on proxies under the Hawaiian
law says the chief justice, until it wa'
suggested by the federal law, whicl
mentions proxies
Justice Perry's dissent is based upol
the conclusion that the particular do
cument in question, given by Val
/ Valkenberg to Paxton, is in fact for
, NAL power of attorney and shOult
therefore be taxed.
The suit was one of great interest T.
all Hawaiian corporations as well a
2 the First National Bank, for prOXie
have been used unstamped for years
; at local meetings of stockholders, an,
the practice still continues.