Court Opinion

ID: 8047889
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:01:28.69705+00
Date Added: 2024-06-11T16:37:35.325268
License: Public Domain

Sargent, C. J.
No question is raised but that the-quotations from the statutes of the state of Michigan, by the counsel upon both sides, are correctly cited.
From these it appears that this stock is taxed in the state of Michigan, under the laws of that state, paying a specific tax of three fourths of one per cent, upon all its capital stock paid in, including two millions of dollars purchase-money paid to the state, and also upon all loans made to said company for the purpose of constructing its road, or purchasing, constructing, chartering, or hiring steamboats ; and it is provided that this specific tax shall be in full for all taxes, charges, or exactions, by virtue of any law of the state.
This stock is in that way once taxed in Michigan. If it was owned in the state of Michigan, it clearly could not be taxed again to such stockholder in that state. The rate of taxation being three fourths of one per cent, on the whole amount invested in the railroad, whether paid to the state, or for construction, or for steamboats, &c., whether represented by capital stock, or bonds, or debts of any kind, regardless, of fluctuations and of depreciations in the market value of the stock, would probably be fully equal to the average rate of taxation in that state, or in our own, from the year 1840 to 1863.
But it is claimed that sec. 5, par. 3, ch. 49; General Statutes, in terms, requires that this stock be taxed in this state to the individuals owning the same, because the stock has not been taxed to them “ by the towns where such corporations are located.” But in this case the specific tax is, by special provision of the statute of Michigan, to be “ in lieu of all state, county, township, or other taxes in this state, on the capital stock of said corporations, and on the railroad, canal, or turnpike, constructed or used by any such corporation, and on the real and personal property in which said capital stock shall be invested,” &c.
This corporation pays a tax on all its capital expended, whether represented by the shares of stock, or the debts of the corporation, and this tax is to be in lieu of all other taxation. If this plaintiff owned bank stock in the state of Michigan, and the stock was all taxed in that state in the town where said bank is located, and, though taxed to the individual stockholders, the bank should pay all such taxes before declaring dividends, then he should not be taxed again upon the same stock in this state. But a railroad is not generally located in any •one town, for the purposes of taxation, as a bank is, but is taxed by the ■state, as in this case; and when that state tax is declared to be in lieu *413of all other taxes, whether imposed by the towns, or in any other way, it is thus made a substitute for such town taxes, which would excuse the stockholder in that state from any town tax on such stock.
And the question is, whether this substitute for the town taxes comes within the spirit of our statute, and answers the requirement of our law. It is hold, substantially, that it does so, in Smith v. Exeter, 37 N. H. 556. But if there were any doubt upon that point, sec. 7 of the same chapter would seem to settle the matter, which provides that “ no statute provision shall be so construed as to subject any stock to double taxation — and see Savings Bank v. Nashua, 46 N. H. 389, and Savings Bank v. Portsmouth, 52 N. H. 17. If there could be any doubt as to the construction of sec. 5, after the decision in Smith v. Exeter, supra, it would seem to be removed by the provision of sec. 7, ch. 49, General Statutes.
But it is suggested that this three fourths of one per cent, is not to bo considered as a tax, but rather a bonus, or royalty, paid to the state for the privilege of constructing and operating a railroad in that state. If this were so, and in consequence of this bonus paid to the state it was the real understanding that the property was to be exempted from all taxation in that state, then the stock should be taxed here. But if the property is really taxed there, and all of it is thus taxed, then it should not be taxed again. By the charter of this corporation, granted in 1846, it was required to pay a certain “ specific tax to the state, and in consideration thereof the property and effects of the company were to be exempt from all and any tax * * by virtue of any law of this state.” This was a provision that the property, by paying one tax, should be exempt from all other taxes. But by the act of 1855 (sec Compiled Statutes of 1872), it was provided that said specific tax to the state “shall be in lieu of all ” other taxes, or a substitute for all other taxes on the capital stock of said corporation, and upon the railroad constructed or used by the corporation.
But we have already seen that this tax paid to the state upon all the capital expended in the construction or purchase of the roads, whether represented by the capital stock, or bonds, or other indebtedness of the company, amounts to a tax as high as the average rate of taxation upon other property in that state or this, from 1840 up to the time of the war; that it was in substance and in fact a tax, and not a bonus or royalty, and was intended to be, so far as we can see, a fair assessment upon the property of the corporation, including its capital stock. This being so, we cannot doubt that this tax should be abated, upon the ground that to tax it again here in this way would be a double taxation of the property.
Tax abated.