Case Name: CENTRAL MILL COMPANY, LIMITED, v. A. J. CAMPBELL, TREASURER OF THE TERRITORY OF HAWAII
Court: Supreme Court of the Territory of Hawaii
Jurisdiction: Hawaii
Decision Date: 1907-01-10
Citations: 18 Haw. 185
Docket Number: 
Parties: CENTRAL MILL COMPANY, LIMITED, v. A. J. CAMPBELL, TREASURER OF THE TERRITORY OF HAWAII.
Judges: EeeaR, C.J., Hartwell and Wilder, JJ..
Reporter: Hawaii Reports
Volume: 18
Pages: 185–186

Head Matter:
CENTRAL MILL COMPANY, LIMITED, v. A. J. CAMPBELL, TREASURER OF THE TERRITORY OF HAWAII.
Original.
Argued January 8, 1901.
Decided January 10, 1907.
EeeaR, C.J., Hartwell and Wilder, JJ..
Taxation — capital stock authorized,.
Act 91, Laws of 1905, requiring tliat upon the filing of a certificate of incorporation in the office of the treasurer of the Territory there shall he paid “twenty-cents for each thousand dollars of the total amount of capital stock authorized,” imposes a tax upon the amount of capital stock issued or authorized by the company not including the additional amount which, by the articles of association, the company has the privilege of issuing by increasing its capital stock.

Opinion:
OPINION OP THE COURT BY
HARTWELL, J.
Act 91, Laws of 1905, provides that "On filing any certificate or other ¡laper, relative to corporations, in the office of the treasurer of the Territory, in addition to the stamp duty and recording fee now charged, the following fees and taxes shall be paid to the treasurer of the Territory for the use of the Territory. Eor certificate of incorporation, twenty-cents for each thousand dollars of the total amount of capital stock authorized, but in no case less than twenty-five dollars," etc.
It is agreed that on June 19, 1906, there were presented for filing in the office of the treasurer of the Territory articles of association of the Central Mill Company, Limited, in due form of law, which have been duly approved, filed and recorded in the office of the treasurer, and that the said company is now and since June 19, 1906, has been a duly organized and incorporated joint stock company under the laws of the Territory; that the articles of association provide that "The amount of capital stock of said corporation shall be Three Hundred Seventy Five Thousand Dollars ($375,000.), divided into Three Thousand Seven Hundred Fifty (3,750) shares of the par value of One Hundred Dollars ($100.) each; and the corporation shall have the privilege of increasing the amount of its capital stock to a sum not exceeding Five Million Dollars ($5,000,000.), and issuing shares therefor accordingly."
L, J. Warren (Smith & Lewis on the brief) for plaintiff.
M. F. Prosser, Deputy Attorney General, for defendant.
The treasurer claimed that the statute required the company to pay a tax on $5,000,000 as its authorized capital, but the company claimed that it was taxable only on the sum of $375,000, being $925 less than the tax claimed by the treasurer. The amount in dispute, $925, was paid under protest and received upon the agreement that if the company's claim should be sustained by the court the treasurer would return the same, and, on the other hand, that if the claim of the treasurer should be sustained the same should be paid by him into the treasury of the Territory.
The amount of the capital stock of the company now authorized is the amount which it has issued, namely, $375,000, and does not include any increase of stock which, under its articles of association, the company may and, of course, may not issue. In other words, the tax is imposed, not upon the right of the company to issue new shares, but upon the capital stock issued or authorized by the company. The statute goes on to require a tax upon "increase of capital stock, twenty-cents for each thousand dollars of the total increase authorized." Whether authority for the increase is found in original or amended articles of association new shares, when issued, in either case, constitute an increase of capital stock and are taxable as such. Until the stock is issued there is noire to be taxed.
The plaintiff may take judgment accordingly.