Upon the pleadings and facts agreed, the court is of opinion that there is no illegality in the assessment upon the plaintiff corporation. Under the provisions of the St. of 1865, c. 283, it is plain that the actual, and ordinarily the market, value of the stock of any corporation, depends upon its capacity to make profitable returns in future dividends to its shareholders. If its present resources are known, and its prospective profits appreciated by the public, if there is confidence in the fidelity and integrity of its officers, the market value of its shares will be the same, whether future dividends are promised and certified in advance by the directors or not. It is not merely the present prosperity, but the probability of future returns, which are elements in determining the value of the corporate franchise. Thus it is reasonable to assume that the aggregate market value of all the stock of the plaintiff corporation, taking into account the amount of reserved profits on hand and the state of facts disclosed here, would, except for the peculiar circumstances of the case, have been equal to the rate determined upon by the tax commissioners, even without the action of the directors of No vember 1866.
By the terms of the outstanding debt of the corporation, the creditors had a right at maturity to take pay in stock to be then issued at par. So long as the character and prospects of the corporation were such as to carry the market value of its shares above their par value, this future right to convert the loan into stock would reduce not only the market but the actual value of the existing shares. The action of the directors, of November 1866, in declaring a dividend payable to the then stockholders, at about the time of the maturity of the loan, either in stock or cash at the option of the corporation, obviated to some extent the injustice which it was thougnt Would be the result of per*404mitting the bondholders to come in and share the benefits of a reserved fund of profits already accumulated. In other words it gave to the existing shareholders the profits which were thought to belong to them, instead of allowing them to remain for the benefit of those bondholders, who might come in under, the new issue of stock. But the plan adopted, while thus equitable, as alleged, to the old shareholders, had the necessary effect to increase the market value of their shares, and to cause them more nearly to represent the actual value of the corporate franchise.
For reasons no doubt satisfactory at the time, it was not thought advisable to issue new stock to the then shareholders in the form of a dividend. But the action taken seems to have reached practically the same result to them. By the arrangement the privilege was conferred upon the shares, and passed with them to each holder of the stock in succession. The fact that a dividend is earned and declared must necessarily increase the market value of the stock, and keep it up until the time of the payment of the same has passed. When it is overdue, it cannot, though unpaid, affect the value of the stock, because it is then separated from it and is due to the person who was the holder.
It is the aggregate value of all the shares, which must be taken as the value of the franchise for taxation; and it makes no difference that, by reason of privileges more or less permanently attached to some of the shares, there is a difference in the market value. If this was in the form, common in some states, of preferred stock, it would then go in at its market value, with the common stock at its value, to make the aggregate. The privilege given to the old shares represents profits now earned by the corporation which cannot be withdrawn until the time fixed for the payment of the dividend. And though in one sense it is a debt of the corporation, yet it is no more a debt than are the reserved profits a debt, which may be said to be due to the individual corporators. It is an element which must be included in ascertaining the value of the franchise.
The action of the commissioners can in no just sense be *405deemed to be adding t'ne debt of the corporation to the value of the property taxed; nor can it be claimed that the right of a stockholder to a dividend declared, but not yet due and payable, is taxable as money at interest, or a debt due, directly to the person in the town where he resides. The dividend may, at the option of the corporation, never be paid in cash, but by the issue of new shares. And such new issue, while it would certainly add nothing to the actual value of the property and franchise, would, upon strict principles, add nothing to the aggregate market value of all the shares; because the value of the privilege will always be added to the shares to which it is attached. Commonwealth v. Hamilton Manufacturing Co. 12 Allen, 305.
Reaching this result upon the merits, we have not considered the question whether this petition can be maintained under the St. of 1867, c. 52. Petition dismissed.