The hill in this cause was filed to restrain the collec' tion of -$11,718,34, being a balance claimed to be due from the complainants to the State of Michigan for specific taxes. The complainants claim that this amount of tax is made up of three fourths of one per cent on six separate items, all of which they insist are exempt from the tax. These items are set forth in the bill as consisting of, First, $300,000 of stock which is averred to consist of three thousand shares which it is alleged were issued in 1849, and delivered to the “then several stockholders of the company, without any consideration therefor, without any subscription being made for said stock, and without any promise from any person whatsoever to pay the amount or any part thereof to said company, nor was any capital directly or indirectly, actually or technically, paid to said company on account of said certificatesSecond, $185,-459,84 which is the amount of discount on the sale of company bonds below par; Third, $250,000 of bonds known as Jackson Branch bonds, which were never sold by the company, but were lent and disposed of by the borrower, who had turned out as collateral the bonds of the Chicago and Mississippi Railroad Company, which the complainants took on settlement and now hold, and which are averred to be worthless; Fourth, $466,848,02,^ being the cost of various steamboats, one of which was destroyed some years since, and the remainder are alleged to have been employed and taxed in other states, and of late have been unemployed and lying idle; Fifth, $300,000 lent by complainants to the Chicago and Mississippi Railroad Company, and secured by-worthless securities; Sixth, $60,136,-87 expenses incurred in 'obtaining loans and selling bonds.
Before inquiring into these items it becomes necessary to consider a question raised on behalf of the defendant, and which is claimed to preclude any investigation of these *450matters. It is insisted that the whole controversy is bound by a previous adjudication of the Supreme Court in the case of The People v. The Michigan Southern and Northern Indiana Railroad Company, which is reported in 4 Mich. 898. In that case three of these items were considered, and it is claimed, inasmuch as all of them then existed, the company became estopped by the decision, on the principle that what has become res adjudicata can not be disturbed. Without considering the technical defects of the answer and proofs on this specific defense, I think it is founded on a misapprehension of the rule. The only controversy in the record in that case, was whether a certain portion of the tax of 1855 was due and jDayable. That controversy only was disposed of; and if any estoppel arises it can not go further. Estoppels arise upon facts, and not upon questions of law. When the latter are decided, they have no further importance than as precedents. That case therefore has no bearing upon any question of law not, considered in it. How far it bears upon any of the questions now before us, under the new allegations and proofs adduced in this cause, I shall consider presently.
The first questions which I propose to examine are those not presented in that case, and which may therefore be regarded as new questions. And for convenience they will be taken up in their inverse order.
The complainants claim an exemption of tax on $60,-186,8^, paid out for commissions and other expenses attending the sale of bonds and the obtaining of loans. I do not perceive upon what ground this exemption can be claimed. The loans which caused these expenses were taxable. The expenses were mere agency expenses, in no wise differing from any other outlays for services. The law does not undertake to follow the money of the company to its several destinations. When once borrowed the company can use it for the proper objects; and should, I think, be held responsible for taxes on it, whether spent *451profitably or not. No business can be transacted without, some unproductive expenditures. The employment and payment of agents is an ordinary necessity, and it is always presumable that their services are worth what they cost. These charges form, I think, no cause of exemption.
The same objection applies to the demand to have a deduction from the tax on account of $300,000 lent by complainants to the Chicago and Mississippi Railroad Company. Having borrowed money which became taxable as a loan, the complainants did not cease to be debtors for the amount by lending it or giving it away. Such a loss might afford an argument for legislative relief, but it can not change their position as borrowers, nor diminish the amount of their loans.
The next item embraces the cost of the steamboats. It appears that one of them has been lost, and that the rest have been lying at Toledo unproductive, and have been taxed in Ohio. This .exemption is claimed on the ground that complainants are not taxable for any capital or loans not “ actually employed in the State of Michigan The third section of the act of consolidation between the Michigan and Indiana Company is relied upon for this exemption. That section is as follows: “ The said corporation so to be organized, by virtue of this act, shall continue subject to the same rate of tax as though such consolidation should not take place; and the amount of its capital and loans hereafter, upon which such taxation shall be paid, shall be such portion of the whole of its capital and loans as is actually employed in the State of Michigan,” &c. By the original charter, the Southern Railroad Company was liable to a tax of three-fourths of one per cent upon the capital stock paid in, and upon all loans made to the company for the purpose of constructing the railroad, or purchasing, constructing, chartering or hiring steamboats.
By imposing the tax on stock and loans, and exempt*452ing the company from other taxes, it is evident the design was to have a standard readily ascertained, and which was not likely to fluctuate. The chance of profit, without which no such work would be undertaken, and whereby under ordinary circumstances, the taxes would be increased, was balanced by the chance of losses, whereby taxation would be diminished. It never was designed tHItt the tax should be lessened by any disaster, any more than that it should be increased by any amount of prosperity. I do not think the consolidation act was designed to infringe upon this principle. When it declares the rate of taxation shall continue the same, it appears to me evident that all the stock and loans formerly taxable were to continue taxable without diminution by losses or unproductiveness. Otherwise the company might continue to own the same identical property, and if found not profitable, might by leaving it idle, exempt it entirely, when if in private hands it would be taxable upon a valuation. And if exempted for losses there would be great inequality unless they should be made liable to increased taxation in proportion to their profits. I think the true meaning therefore of the whole section, which refers to capital and loans actually employed in Michigan, must be deduced from the design of the new law to apply the old principle as far as possible to the new state of things. The original company was a Michigan company, and all of its capital was in the eye of the law employed in this State. Whatever money it may have expended in feeders by land or by water must have been regarded as merely ancillary to its home business, and expended upon it. Had any losses then taken place no one can suppose they could have formed any basis for a deduction from the taxes on stock and loans.
The object of the consolidation act was to enable this company to form a union with another company in Indiana; and by the terms of the act the new corporation was to be governed substantially by the old charter. That *453other company being formed under the laws of another State, held its own property exempt from our laws. There was no reason why that should not remain exempted, while there was no reason on the other hand for exempting- what was already subject to our jurisdiction. Looking at the whole subject, I think the term “actually employed” has no reference to the actual use of the property purchased by the company, but is merely designed to distinguish the Michigan investment from the Indiana investment. Because the capital of a company or an individual has been used to purchase a steamboat, it can not in any just sense be regarded as employed in every part of the world where the vessel may navigate, nor as unemployed when she is in ballast, or losing money, or laid up. The capital of an individual is regarded as employed or invested at the place where the owner does business. The capital of a New York or Boston merchant is employed in New York or Boston, no matter where his ships may be. This is the view taken by the Supreme Court of the United States in Hayes v. The Pacific Mail Steamship Company, 17 How. 596, where New York vessels employed in the California trade were held exempt from taxation in California. Whether allowing vessels or other property to remain in a place for a length of time may or may not confer a right to tax them there, is not decisive of the other question. The capital remains invested where the owner transacts his business, and is not transitory. The bill shows the steamboats were a part of the original Michigan investment. They remain in specie the property of the company, except one which was destroyed. I do not perceive how the original investment has been altered, And therefore, I think no deduction should be made from the tax on their account.
The next item on which a deduction is claimed consists of §250,000 of Jackson Branch bonds, which were lent by complainants and misappropriated. This item was considered *454by the, court in the ease in 4 Mich. 398. It was there held that, inasmuch as these bonds were there stated to have been exchanged for other bonds of another company, it must be presumed that the latter were regarded as an equivalent. The case as now presented is different, and no such presumption can arise. It now appears that there was no exchange of securities. whatever, but that the complainants, when they were unable to recover their own bonds, accepted the collaterals in payment. When collected or sold, or otherwise disposed of for value, I think the proceeds of these may fairly be considered as a loan to the complainants. But so long as they remain on hand uncollected and unconvertable, they can not fairly be considered as money or its equivalent. No loan has been made to the complainants on the credit of these Jackson Branch bonds, until some benefit has accrued from them.
The next item embraces §185,459,84, which sum represents the discount on bonds sold. It was held in the case before referred to, 4 Mich. 398, that the loans to the company must be taken to stand at the face of the bonds. This, I think, is a fair presumption, but not a conclusive one. The law permits complainants to sell their bonds at a discount, and therefore contemplates that they may have to repay more than they borrow. The tax is to be laid “upon all loans made to said company.” Sec. 31 of Charter, Laws 1846, p. 191. Nothing is lent which does not pass from the lender; and if in return for his ninety dollars he is to receive ninety - five or a hundred, he still lends but ninety. It appeal's that no bonds were sold at a premium, and that the amount' of loans was less than the face of the bonds by the amount above mentioned. I think no tax can be properly laid on this sum, because it was never borrowed.
The remaining item of §300,000, is claimed to be exempt from taxation because it is alleged to consist of 3000 shares of stock distributed among the stockholders in 1849, *455without any consideration pai’d, and without any subscription or promise to pay for it. It is also alleged that no portion of the means of the company was ever obtained from such stock. This is the same ground upon which payment of the tax was resisted in the case before referred to for the year 1855.
The term used in the section under which the tax was originally laid is “capital stock paid in.” Upon the case made by the bill the company deliberately issued stock as paid, and has always so treated it. It has, as fully appears, changed hands so as to become entirely confused. The holders of it have received dividends upon it, as full paid stock. It so stands for all ordinary purposes. I see no hardship in holding complainants responsible for taxation on what they hold out to the world as cash capital. And in this respect, I think the former decision was right. The company had debarred itself upon this theory from calling any more assessments. And the ordinary understanding of stock paid in, is stock on which no further calls can be made. It is n matter of daily occurrence to pay for labor and other expenditures in what is termed “ full paid stock,” at rates very different from what would be required in cash. The company obtains the same credit for one kind as for another when it seeks public confidence on the ground of its paid up capital. If instead of taxing the company, the several stockholders should be taxed on stock, one •share would avail no more than another.
But when we examine the evidence, the case made out by the bill is not only not established but entirely disproved. And as a complainant must rely upon the case set up in his own bill, he is entitled to no relief, even if the rule of law laid down in deciding the ' former case were to be disregarded.
It appears by the sworn report of the complainants upon which this tax is chiefly based (p. 18 of case) that the total amount of capital stock subscribed in the entire con*456solidation is $9,413,800, and that the amount actually paid in is $9,408,802 32. As no more than its face is likely to he paid in, this would leave a deficiency of only $4,997,68, to be applied to the entire stock. It is true the same report contains at its close an averment of the amount of the capital stock of the Michigan Southern Railroad at the time of the consolidation, showing then the deficiency of $300,-000 on account of nominal stock, stating, “ no part of which however was ever paid in” This statement, if true, is consistent with a payment subsequent to the consolidation. Mr. Bliss, however; by his testimony, shows that this report, which he also verified, is incorrect.
Being asked by the second and fifth interrogatories concerning the existence of unpaid stock, he shows a deficiency of about $160,000, which he thinks was for that amount unpaid on 8000 shares of stock. The evidence of the amount refers under the second answer to the time of the consolidation. The fifth answer appears to show that, so far as he knows, it was never paid. This makes a discrepancy in the report of $140,000, if we entirely disregard the small deficit appearing in the sum total of consolidated stock, which, however, from its minute accuracy has evidently been taken from accounts and not from estimates.
The testimony of Mr. Bliss, however, and the exhibits A and B, which he proves from the company’s records, show very clearly the character of the stock distribution of 1849, and show conclusively that there was never any distribution of 3000 shares of fictitious stock, nor any other amount of that kind. It appears from those resolutions, that the stock which had been divided into 5000 shares was recalled, and a new division of 8000 shares made in lieu of it, all to stand on the same footing — all credited equally with what had been paid in, and all equally chargeable with future calls. The amount paid in on each share was $45, making an aggregate of $360,000. There is no reason to suppose that any portion of this sum was fictitious. *457By the charter, complainants were required to pay previous to this time $175,000 of principal, and, besides this, interest, which at six per cent, computed as the various instalments became due, would amount to $60,000 more, making an aggregate of $285,000 on this account alone. The charter required an immediate expenditure of $20,000 for [rolling stock (Sec. 2, L. 1846, p. 171). The company was also required to proceed at once with various lines to be constructed or finished within given periods. Whether this work was done or not, it is hardly presumable that the remaining sum of $105,000 would exceed the expenditures on construction account for the first three years, over and above any earnings so applied. But be this as it may, no portion of the testimony in any way goes to discredit the fairness of the basis of the resolutions.
It was claimed by complainants’ counsel on the argument, that the testimony of Elisha C. Litchfield shows the fictitious character of the 8000 shares, That testimony is not very intelligible, and is evidently an attempt to explain the issue upon a mistaken theory. But if its facts be taken as accurate, its deductions are clearly erroneous, and would show merely a deficiency of $88,470 unpaid, instead of making that sum represent the entire payment. The resolutions of August, 1849, made the whole 8000 shares liable to further assessments to the amount of $55 per share, or $440,000, supposed to represent the debts and liabilities of the company. These debts Mr. Litchfield puts down as consisting of $325,000 unpaid principal of the purchase money due the State, and $76,580 debts for prior loans. By deducting these from $440,000, he deduces the balance of $88,470. He treats this sum of $440,000 as if it had been credited to the stock, when it was on the contrary charged on it, and, unless it exceeded the debts, it made the stock liable to its entire face. The interest on the $325,000 of State indebtedness at six per cent., if principal and interest should be paid promptly, would amount to $68,250, which not only *458extinguishes the balance of $38,4'70, but would leave an excess of about $30,000 after the face of the stock should have been paid in.
When all the evidence is collated, it is impossible to say that any particular deficiency, or any deficiency, is made out. The issue of any fictitious stock is clearly disproved. And all the stock being put on the same basis, it is not presumable that assessments have been since made on any but the just and equal principles which are required by law to be observed. The case does not assume any thing of this kind. Neither is it averred or shown that any assessments called on this stock remain unpaid. The payment of dividends on it would be inconsistent with such a theory. The books of the company must show the precise state of the stock account in regard to the whole issue. The evidence is in the control of the complainants. Until the original sources of evidence are resorted to, all outside testimony must be vague and unsatisfactory, as this record very fully exemplifies. If complainants have not received what should have been received on any of this stock, no one else has the means of ascertaining it, and I do not think their proofs at all satisfactory.
I am of opinion that a deduction should be made from the amount to be taxed of $250,000, for the lent bonds, and $185,459,84, for discounts on loans, and that no further deduction should be allowed on the case' presented.