Court Opinion

ID: 8076137
Source: CourtListenerOpinion
Date Created: 2022-09-09 12:25:02.455206+00
Date Added: 2024-06-11T16:38:16.395622
License: Public Domain

INGRAHAM, J.
(dissenting). The deceased being a nonresident, it was only the transfer of his property in this state at the time of his death that was taxable. He was the owner of capital stock of the Boston & Albany Railroad Company. That corporation was formed by the consolidation of two railroad corporations, one in the state of New York, and the other in the state of Massachusetts, authorized by an act of the Legislature of the state of New York (chapter 917, p. 2399, Laws 1869) and an act of the state of Massachusetts. The act of 1869 authorized a railroad corporation organized under the laws of this state to consolidate with railroad corporations organized under the laws of other states for the purpose of operating railroads or bridges, either wholly within or partly within and partly without the stale, and enacted that, upon the consummation of said consolidation, all the rights, privileges, ex*1010emptions, and franchises of each of the said corporations shall be deemed to have been transferred to and vested in the new corporation. A similar act was passed by the state of Massachusetts, and, under the authority conferred by these two acts, several railroads consolidated and became the Boston & Albany Railroad Company, and they have operated a railroad from the city of Boston, Mass, to the city of Albany, N. Y. The deceased was a resident of the state of Connecticut, and the only ground upon which he can be said to have any property within this state is the fact that this corporation was by this act created a domestic corporation, and that by the transfer of the stock upon the death of the testator there was a transfer of property within this state. While the new corporation that was created by the consolidation became a domestic corporation, so far as it owned and operated a line of railroads in this state, it was also a foreign corporation, so far as it owned and operated a railroad in the state of Massachusetts. Its right to exist and operate its railroad in Massachusetts depended, not upon the law of this state, but upon the law of the state of Massachusetts, and its property that it owned in that' state, it seems to' me, it owned as a foreign and not a domestic corporation. It is undoubtedly true that the transfer of the shares of stock was taxable in this state; but I think that, where a corporation owns property in this state under its domestic charter, and owns properly in the state of Massachusetts under a Massachusetts charter, a transfer of its stock cannot be said to be a transfer of property in this state, so far as that property is represented by its road and real property in Masachusetts owned and operated under the law of that state. Just how this property shall be apportioned it is not necessary now to decide, but it seems to me to be a gross injustice to require a stockholder in this Massachusetts corporation, not a resident of this state, to pay taxes upon property held and operated under the authority of the Massachusetts charter, over which this state has no control. A stockholder of a domestic corporation is liable to a tax upon the value of his interest in the whole of the corporate property, as evidenced by the number of shares of stock which he holds (Matter of Palmer, 183 N. Y. 238, 76 N. E. 16), as, the stock being that of a domestic corporation, the transferee of the stock must come into this stati to transfer the stock and secure his rights in the corporation. But the stock of this corporation is actually transferred in Massachusetts. The owner is not dependent upon the law of this state to secure his rights in the corporation, except so far as it effects the property of the corporation within this state. The courts of this state would have no authority or control over the property of this corporation in the state of Massachusetts, and I do not think that the proportion of. the property in the state of Massachusetts is subject to taxation in this state.
I dissent therefore from the affirmance of this order.