State v. Kidd

SHARPE, J.

'These cases originated in contested assessments of property supposed to have been subject to and to have escaped from taxation during the years from 1893 to 1S98, inclusive. In this court they were heard and submitted together and will be considered together.

The principal items 'assessed are shares of stock in foreign railroad corporations, ¡and in each case the question arises whether, by the revenue laws contained in the Codes of 1886 and 1896, respectively, such shares were subject to taxation as against a resident owner.

On the general, subject of taxing shares of corporate stock there are differences 'between the provisions of the former and those of the present Code. Neither of them expressly designates as taxable -shares in foreign corporations having no place of business or property in this State, though in each Code appears a general clause declaring subject to taxation “all other property, real and personal, not otherwise specified.”

• Shares in stock of corporations are property and by ■our statute they are made to come within the term, personal property.- — 'Code, § 3906, sulbdiv. 2. Such prop-N <erfy is -intangible and incapable of -having an actual location, and its anomalous character has given rise to some difficulty in fixing its legal situs. In Varner v. Calhoun, 48 Ala. 178, it was held that a taxon stock in a foreign corporation, though expressly named as taxable -by the existing statute, could not be collected. Tbat-\ decision, however, appeal’s to -be against the weight of authority and at variance with the principle declared by this court in Boyd v. Selma, 96 Ala. 144. The latter case, we think, asserts the true doc-trine, which is to the effect that, unless otherwise fixed by statute, the situs of shares of stock for the purpose of taxation is at the *421owner’s domicile. — Burroughs on Taxation, § 50; South Nashville St. R. Co. v. Morrow, 87 Tenn. 406; 2 L. R. A., 853, and authorities cited on this subject in appellant’» brief. We are unwilling to follow the 'decision in Varners’ Case, supra, and it must be overruled.

With some exceptions founded on public policy and other peculiar grounds, taxing laws 'should be, and generally are, conformed to the principles of equality and natural justice, which require that the burden of maintaining public revenue should be rested upon all property within the jurisdiction. Out of this consideration, has grown a rule of construction to the effect that from statutes providing for taxation of property generally,, exemptions are not made except by clearly expressed, terms. — Cooley on Taxation, 146; Dauphin, etc. R. Co. v. Kennerly, 74 Ala. 583; Bank v. Billings, 4 Pet. (U. S.) 514; 25 Am. & Eng. Encyc. Law, 158.

By the Code of 1886 capital stock in domestic corporations is made taxable against the corporation itself' with deductions on account of other property which they are required to list for taxation.' — § 453, subdiv. 9, and § 478. Subdiv. 8 of § 451 directs that “the- share® of the capital stock of any company or corporation which is required to list its property for taxation in this- State shall not be assessed against the shareholders of such company or corporation.” This clause applies in terms: to shares of a particular class, and lia» no reference to corporations having no property list for taxation in this State. — McIver v. Robinson, 53 Ala. 456. The exemption and likewise the distinction made between the two classes of corporations could only have been inspired toy the consideration that the burden certainly imposed by our laws on property of the corporation would indirectly diminish the value of its stock, while in the of a corporation having no property within the jurisdiction, no such result could follow, except from foreign legislation, over which this State has no control and for which it is in no way responsible.

The -same spirit of legislation is discovered in the Code of 1896, but from it the exempting clause is omitted and in the schedule of taxable property there is *422placed “every share of any corporation organized under the laws of this State or any other State or of the United States (other than railroad, telegraph, express and sleeping car companies, building and loan associations and banks or hanking associations), to he assessed and collected in the county wherein such corporation has its chief or home office in this State, and to he assessed at its actual market value to the person in whose name such shares stand on the hooks of the corporation, and not to the corporation.” — § 3911, subdiv 9. The same section proceeds to prescribe a mode for assessing shares and also corporate property, and for deducting the value of the corporation’s taxable property from the value of the shares, so as to make the shares taxable only upon the excess of values. While the Avords used in the beginning of this subdivision 9, standing alone, would to include all 'corporations, the provision,' taken as a Avhole, would he meaningless and abortive in respect of foreign 'corporations having neither property nor habitation in this State, since the fixed plan of assessment Avould not he pursued, either as to place or property. A reasonable interpretation of this whole provision for taxing shares confines it to shares in corporations having taxable property in this State. An exception can be no broader than the class from which it is taken, and bracketed exception of shares in railroad, telegraph, express and sleeping car companies must likeAvise be confined to corporations having property subject to taxation here. The exemption of those shares is doubtA less for tlie reason that elsewhere special provisions are made for taxing the property and privileges of the last-named corporations, which provisions could have no application to foreign corporations having no property and doing no business here. As to shares in them,' we find nothing in either Code Avhich should be construed as an exemption. By subjecting them the State does not fringe its -general -policy of avoiding double taxation, for the property -is not doubly taxed by its -OAvn laAvs; and it is not Conn'd, Iby comity or otherwise, to -conform to laws elsewhere in order to shelter property from burdens Avhich, but for such foreign bnvs, would not have come *423upon it. That ownership of shares in capital stock distinct from ownership of capital stock itself is generally if not everywhere recognized. Such shares are property, and as such, belong in, and are taxable in the State of the owner’s residence, irrespective of legislation in another State. — Dwight v. Mayor, etc., of Boston, 12 Allen, 316.

If there is anything in the suggestion made in appellee’s brief that deductions from .share assessments al-V lowed by the statute on account of assessments against property of the same corporation works undue discrimination as against shares in corporations having no property here to be so assessed and deducted, the infirmity lies in that part of the statute which allows the deduction, and not in that part which imposes the tax, though we do not intimate that there is any such infirmity. It does not follow’' that because a specially\ Revised plan of taxation be inadequate or abortive that property to which it relates will escape taxation, for it may be reached and taxed under general provisions where they are adequate. — Sumter Co. v. Bank of Gainesville, 62 Ala. 464.

As against the validity of the assessments against appellees, other than those shares of railroad stock, nothing has been suggested which requires particular consideration.

Tax assessments made in the line of official duty are entitled to the usual presumption of correctness which attends the acts of public officers. — Perry Co. v. Selma, etc., Railway Co., 65 Ala. 391; 25 Am. & Eng. Encyc. of Law, 286 ; 2 Destv on ’Taxation, pp. 615, 616. The of assessing for escaped taxes and of making a list and return thereof is by the statute imperatively enjoined upon the assessor, and such list and return is of equal dignity as evidence with lists made f or the current year. ’The evidence introduced upon the trial tended 'to show a valid assessment of property 'in both these cases and in each of them the circuit court erred, in giving the general affirmative charge for the defendant.

The judgment must be reversed and the cause remanded. ,