Court Opinion

ID: 9417103
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:03:25.757137+00
Date Added: 2024-06-11T17:19:37.040602
License: Public Domain

*691Mr. Justice Strong,
with whom, concurred
Mr. Justice Clifford and Mr. Justice Field, dissenting.
I cannot concur in the judgments entered in these -cases. If .there be any doctrine founded in justice, and necessary'to the safety and continued éxistence of a State, it is that all presumptions are against the legislative intent to relinquish the power of taxation .over any-species of property. In The Providence Bank v. Billings, 4 Pet. 514, Chief Justice Marshall, speaking for the court, said: “As the whole Community is interested in retaining if undiminished, that community has a right to insist that its- abandonment ought not to be presumed in a case in which the deliberate purpose of the' State to abandon does not appear.” In The Ohio Life Insurance and Trust Co. v. Debolt, 16 How. 416, Chief Justice Taney, speaking of legislative acts , incorporating companies, said:. “ The rule, of construction in cases of this kind lias been well settled by this court. The grant of privileges and exemptions to a corporation are (is) strictly construed against the corporation and in favor of the public. Nothing passes but what is granted in clear and explicit terms. . And neither the right of taxation nor-any other power of sovereignty which the community have an interest in possessing undiminished will be:' held by this court to be surrendered, unless the-intention to sufrender is manifested,by words too plain to be mistaken.” This doctrine we have-many. times reiterated' and. applied. And -I do not understand that it is now .denied. BuiT think a majority of my brethren, in -the., judgments now given, have failed to apply it to the'construction of the acts of the Tennessee legislature under consideration in these cases.
One other thing, it appears to me, should be regarded as settled beyond.doubt. -It is'that a¡ tax upon a corporation proportioned to the capital stock, or to' the number of shares of' its .capital' stock, is a different thing from., a tax upon the individual shareholders of stock in the corporation. The capital stock, and the shares of that stoek in the hands of stockholders, .are different properties,, and consequently distinct subjects for .taxation.; An exemption of the one. is hot of itself an exemption of the other/nor is the taxation o'f the one a tax upon the other in such a sense- as to interfere with any'exemption the lat*692ter may'have from taxation. In The Delaware Railroad Tax, 18 Wall. 206, a clause in a charter providing that a company should, in addition to other taxes, pay to the treasurer of the State, for its use, one-fourth of one per cent upon the actual cash value of every share of its capital stock, was held to be not a tax upon the shares of the individual stockholders, but a tax on the corporation, determined by a rule which, though arbitrary, was yet approximately just. So, in Van Allen v. The Assessors, 3 id. 573, this court, said a tax on shares of stock is not a tax on the capital of a bank, and that the shares are a distinct, independent interest or property held by the stockholder, and, like any other property that may belong to him, subject to taxation.
If, nowi these two acknowledged doctrines áre allowed to ‘have their just effect upon the decision of these cases, I cannot see how the stockholders in the several corporations whose charters we are requested to construe can claim an exemption from- taxation'-upon their individual shares of stock. The exemption clause in the charters of two of the companies is: “ Said institution shall pay to the State an annual tax of one-half of, one per cent on each share of capital stock subscribed, which shall be ■ in lieu of all other taxes.” The exemption clause in two other of the charters is in substantially the same words, except that the word “ company ” is substituted for the word “ institution.” The clause iri the fifth charter reads thus: “ That there shall be levied a State tax of one-half of one per cent upon the amount of capital • stock actually paid in, to be collected in the same way and at the same time as other taxes are by law collected, which shall be in lieu of all other taxes and assessments.” ' . /■
I agree with the majority of the court that there.is no substantial difference in the extent of the exemption offered, in these several charters, though there is some difference in their phraseology. But I think that the benefit of the exemption is in each case for the corporation. It was not intended for the individual stockholder. The legislature' were dealing with the proposed corporations. The corporate power granted and the. immunities allowed were to the corporations, and- the contract found in the charter was with the artificial being created. *693rather than with the natural persons who might have an interest in. them. The language of the' acts is, the “ institution ” shall pay, or the . ‘‘.company ” shall pay, an annual tax, which shall be in lieu of all other taxes. It was, • therefore, the institutions or corporations the legislature had in view, alike in imposing the tax and granting the immunity, and not the natural persons who might happen to own shares of stock in the corporations. It is true that in several of the charters the corporations are required to pay a tax on each share of capital stock subscribed, ánd in one upon the amount of capital stock paid in. Henc.e it has been argued the legislature had shares in view ; and from this the further inference is sought té be drawn, that the purpose was to tax alike the corporations and the stockholders, and to exempt both from all other taxation.' Such a construction is, however, directly in conflict with'the’ ruling in The Delaware Railroad Tax, supra, and with the expressed déclarátipn that the- company or.- institution shall, pay the tax to the State, which was to be in lieu of other' taxation. Besides, the reference to each sha’-e of .capital stock subscribed is easily accounted for, without holding that the shareholder, as wéll as the companies, were intended to-be exempted. The amount of capital stock authorized for each company was fixed by its charter, and. divided into shares. . It Was quite possible that the whole stock authórized might not he subscribed. In vie-w of this, the companies were required to pay a tax, not upon their entire authorized capital, but to'the extent of the shares subscribed. If siich was the intent df the legislature, reference to the shares was necessary, .and it .raises -no implication that .the tax imposed-was designed to be. for the individual interest .of the shareholders in the corporations, and that the exemption from further taxation-was granted to them..
After all, the .true question .’in these .cases is, whether a contract in express terms between the State and a corporation, to exempt its property and franchises from taxation, shall, by. construction, extend to and exe’mpt 'the property of individual stockholders, — property which, for the purposes of: taxation, is entirely different from that of- the corporation. • I think there is no ground for such a construction ; none for any such implication. If, .however, I; am mistaken, it is certainly true *694that such a construction is not necessary. The words of the charter granting the exemption are fully satisfied by confining their operation to the corporations, themselves; and I do not feel at liberty to give them a broader significance, in view of the'settled rule I have noticed, that a. State’s right of taxation will not be held to have been surrendered unless the intention to surrender is manifested in words too plain to be mistaken. H ad the legislature intended to extend the exemption beyond the companies themselves, it would have been easy to place the intent beyond doubt, by simply saying the tax should be in lieu of all other taxation of the company or its stockholders. But nothing like this, or equivalent to it, is found in the charter.
I find nothing in Gordon v. The Appeal Tax Court, 3 How. 133, so much relied upon by the plaintiffs in error, necessarily inconsistent with what I have said. That case has not been well understood. The circumstances were peculiar, and the decision rendered should be considered with 'reference to the peculiar facts which appeared in it. What was, in fact, decided we had occasion'to observe in People v. The Commissioners, 4 Wall. 244, where Mr. Justice Nelson directed attention to -the circumstances that more or .less controlled the judgment.
For these reasons, which I have, 'not time to elaborate, I think the judgments of the Supreme Court Of Tennessee should be affirmed.