Court Opinion

ID: 8192479
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:35.265758+00
Date Added: 2024-06-11T16:40:24.847921
License: Public Domain

The following opinion was filed June 22, 1917:
Winslow, O. J.
(concurring). I agree entirely with the decision in this case as expressed in the opinion of the court, and I add a few words only to notice a single contention made by respondent which is not specifically discussed in the opinion, namely, the contention that there is an irreconcilable conflict between the decisions in the Van Dyke Case (Van Dyke v. Milwaukee, 159 Wis. 460, 150 N. W. 509) and the Bundy Case (State ex rel. Bundy v. Nygaard, 163 Wis. 307, 158 N. W. 87). This contention seemed to be practically acceded to by the attorneys for the Tax Commission upon the argument of the case, but we regard it as entirely unfounded.
The questions presented in the two cases were absolutely different. In the Van Dyke Case a stockholder received a dividend declared after the Income Tax Law went into effect out of a surplus accumulated by the corporation before the law went into effect, and this court held that it was income received by the stockholder within the meaning of the law.
In the Bundy Oase a stockholder received no dividend, but simply sold his stock in 1914 at exactly the price which he could have obtained for it January 1, 1911, and this court held that by this transaction he had received no income because his stock had not increased in value a farthing since the passage of the law, and it was said that the word “income” as used in the constitution and the statutes means profit or gain, and as there was no profit or gain there was no income.
There is plainly no conflict between these decisions. Prop*293erty does not have to be created to constitute income. That which is principal in the hands of one person may be “income” when received by another. Suppose A. had property worth $10,000 in hand at the time the Income Tax Law went into effect and disposed of it a year later for exactly $10,000, he has received no income, but if he conveys it to B. as compensation for services, B. has clearly received an income and is subject to an income tax.
In support of the motion there was a brief by Bundy & Wilcox of Eau Claire, and a separate brief by Harry L. Butler of Madison as amicus curice.
A corporation is one person, a stockholder in the corporation is a different person. Undivided profits in the treásury of the corporation belong to the corporation, not to the stockholder. They may be lost or squandered or put into improve-' ments of the corporation property and never come to the hands of the stockholders. Such profits which were in existence at the time the Income Tax Law went into effect remain property so far as the corporation is concerned and in no sense income received by the corporation; but, when dividends are declared out of them, such dividends become in every proper sense income in the hands of the stockholders.
For these reasons we perceive no conflict between the two decisions.
The respondent moved for a rehearing.
The following opinion was filed December 4, 1917:
Pee Curiam.
Upon motion for rehearing the relator makes the specific claim that the Income Tax Law as construed by the court “authorizes taking of private property for public use without just compensation and without due process of law, and denies to relator the equal protection of the laws of the land, in violation of the Fifth and Fourteenth amendments to the federal constitution.”
*294We have considered tbe arguments advanced in favor of tbis contention and do not find them convincing.
Tbe other contentions advanced in support of tbe motion are not considered to be well founded.
Motion denied, without costs.