Opinion,
Mr. Justice Clark :The defendants in pursuance of an act of assembly of May 7,1832, P. L. 1831-2, 528, and the several supplements thereto, erected and for many years have maintained a bridge across the Schuylkill river at Matson’s Ford, Conshohocken, in Montgomery county. The capital stock of the company was $45,000, all of which was paid in. Under the act of May 8, 1876, P. L. 131, and its supplements, proceedings were had to declare the bridge a county bridge; viewers were appointed, who reported in favor of the applicants, and that by means of the taking of the bridge for public uses the president, managers, and company of the Schuylkill bridge, at Matson’s Ford, would sustain damages to the amount of $75,000; the report was subsequently approved by the grand jury, «with the concurrence of the court, and on June 12, 1886, the county commissioners took possession of the bridge, and caused the collection of tolls to cease, having first paid to the bridge company the $75,000 damages.
On September 15,1886, the auditor-general with the approval of the state treasurer, under the provisions of the act of June 7, 1879, made a settlement for taxes upon the capital stock of the bridge company, embracing a tax of $1,500, being at the rate of 33£ mills, on the ground that the company had divided amongst the stockholders $30,000 out of the sum realized from the sale of the company’s property, in excess of the amount paid in on capital stock, which was alleged to be a dividend of 66-| per cent, on their capital stock. An appeal was taken to the Common Pleas of Dauphin county, and the *275settlement was by that court sustained. The error assigned is to the decree of the court sustaining this item in the settlement.
It is clear that $75,000 was awarded to the company as the value of its property; the award was of damages, but the damages were necessarily computed upon the value of the private property, which had been taken and applied to the public use. The transaction between the state and the company under the act of May 8,1876, cannot perhaps be characterized as a sale, but the title to the bridge property passed from the company to the commonwealth under it, as it would under a contract of sale. The commonwealth had a right to take the property for public use, by paying the price which might be placed upon it by viewers appointed for that purpose, pursuant to law. The franchise of the company was rendered wholly valueless by the creation of a free bridge, and the company was obliged to and did at once discontinue the corporate business; the value of the bridge and also of the franchise which was thus destroyed is represented in the award of $75,000: Montgomery County v. Schuylkill Bridge, 110 Pa. 54. This action of the company would not ordinarily effect a technical dissolution, but it was the undoubted right of a merely business corporation, when its property was appropriated to public use, to wind up its affairs, and, after payment of its debts, to distribute its property among the holders of the stock. The distribution is in all respects the same as if made on an actual legal dissolution. The stockholders were entitled, first, to receive the amount of their capital stock; and, second, their proportion of the surplus, according to the number of shares held by them respectively. This surplus whilst the bridge was in operation was in some sense, perhaps, part of the capital; but when the time came for a distribution it was clearly a surplus of profits arising out of the business, either from an accumulation of undivided gains or from the general appreciation of the property. The design of the act of 1879 is accurately stated by the learned judge of the court below: “The theory of the act is that the profits realized by the corporation, whether directly arising from its operations from year to year, or from the increase in the value of its property from whatever cause, will sooner or later reach the pockets of *276the stockholders, and that when they do, they furnish a fair measure of the value of the capital stock, and, therefore, the amount of tax which it ought to pay.” The tax is on the capital stock, not on the dividends": Phoenix Iron Co. v. Comm’th, 59 Pa. 104. The case just cited was determined upon the acts of May 29, 1844, and April 12, 1859, the provisions of which, however, were in this respect similar to the provisions of the act of 1879. The whole sum distributed represents the actual value of the shares, but the value for taxation is to be fixed by the aggregate of the dividends of profits made or declared during the fiscal year. It is not required in order to determine the value of the capital stock, that the dividends shall be formally declared; a profit made or passed to the stockholders becomes the measure of the state tax. The formal declaration of a dividend is conclusive; the company is estopped by it whether the dividend be earned or not, but it is not conclusive, in respect of the commonwealth, that all the earnings and profits of the year have been embraced in it. “ The precise measure of the value of the stock in each and every year,” says the learned judge of the court below, “ may not be furnished by the dividend of that year. Thus a corporation may make a profit, in a given year, of sixteen per cent, and divide but ten. In that event, its tax for that year would only be at the rate of five mills on the par value of its capital stock, instead of eight mills, as it would have been if the sixteen per cent, had been divided. But the amount undivided will remain in the treasury of the company to be divided the next or some subsequent year; or, if invested by the corporation, will increase the value of its property, and thus enable it to make larger dividends in the future, and consequently increase its rate of taxation; or to make a stock dividend with a like result; or to divide a larger surplus among its stockholders when it ceases business. In one form or other the profits will reach the stockholders and in doing so will furnish a measure for the taxation of the capital stock.”
Upon a full examination of the whole case, we are of opinion that the conclusions of the court below are in accordance with the spirit and purpose of the act of 1879, and that the fund of $30,000 is a profit which the company made in its business; and, as that profit has been divided among the stock*277holders because they are such, and in proportion to the number of shares held by each, such a transfer must be treated as the making of a dividend, the amount of which declares the measure of tax to whieh the capital stock is subject.
The judgment is affirmed-