Court Opinion

ID: 3554492
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:05:59.960418+00
Date Added: 2024-06-11T09:36:05.419625
License: Public Domain

Those portions of the statutes of the United States and of this state, which are involved in this case, are sufficiently cited in the opinion of my brother SMITH, and it is therefore unnecessary to cite them again.
Are these provisions in the law of the United States and in the law of the state in conflict with each other? and are they so in conflict that the law of New Hampshire cannot be enforced?
It is conceded in this case that the par value of the shares is much less then their actual value. What might be the construction if there were no surplus, and the shares were below par, is not now necessary to be considered.
The legislature of New Hampshire has, for reasons satisfactory to those whom it represents, provided that a certain portion of banking *Page 44 
capital shall be taxed to the stockholders in the towns where they live, and a certain other portion in the towns where the banks are located. It is probable that there are satisfactory reasons why this should be so. It seems reasonable that banking corporations should contribute something towards the expenses of those towns of whose institutions and governmental arrangements, police and otherwise, they have the benefit. This might be effected by taxing the shares at their par value to the owners in the towns where they reside, and the excess over the par value of each share due to the surplus capital proposed to be taxed, to the owners in the towns where the banks are located. This would be exactly Within the terms of the U.S. statute, and would be, as it seems to me, entirely unobjectionable. If, now, it were further provided that this tax on these shares should he paid by the bank, and charged to each shareholder's account, this would obviously be a very great convenience, would be entirely consistent with the law, and, I think, could not in any way be objected to. National Bank v. Commonwealth, 9 Wall. 353.
Now, the surplus capital proposed to be taxed is precisely the aggregate of the values above par of all the shares due to that surplus, and the dividends payable to each stockholder are precisely the profits not reserved divided by the whole number of shares. If, they, the surplus capital is taxed in one sum to the bank, and paid by the bank out of its profits, precisely the same result would be produced, excepting in a more convenient and less expensive form. All the shares would be taxed exactly as before, each share would bear the same sum, the same amount would be taken out of the fund for division, and each shareholder's dividend would be diminished by the exact amount of his tax. Identically the same result would be produced as if the statute had been more literally followed the only difference being that in this mode the shares are taxed to all the shareholders by the name of their association.
In this nutshell lies the whole question. The result produced by this mode of taxation is demonstrably exactly the same. Can the state do, in this slightly indirect mode, what it is conceded they may do directly? It appears to me that the objection is untenable, and a very poor kind of word-catching.
It may also be remarked, that, in so far as the objection founded any supposed interference with a government agent is concerned, it cannot possibly make any difference whether any surplus capital should be taxed to each shareholder by increasing the appraisal of his stock, to the shareholders all together by their corporate name. The statute expressly authorizes doing it in the first mode.
The supreme court of the United States is of course the tribunal of last resort. I know of no case which has yet been decided, involving the exact point presented by this case. As at present advised, I find no difficulty in agreeing to the results which the court has reached.