In re Culver's Estate
| Decision Date | 15 December 1909 |
| Citation | 123 N.W. 743,145 Iowa 1 |
| Parties | In the Matter of the Estate of ALMIRON CULVER, deceased, W. W. MORROW, Treasurer of State, Appellant, v. MELISSA GOULD, Administratrix |
| Court | Iowa Supreme Court |
Appeal from Pottawattamie District Court.--HON. O. D. WHEELER Judge.
Reversed.
H. W Byers, Attorney General, and George Cosson, for appellant.
Montgomery & Hall, for appellee.
THE opinion states the case.--Reversed.
Almiron Culver at the time of his death was a resident of Kansas. He left to collateral heirs the following property: Ten thousand eight hundred dollars ($ 10,800) in cash deposited in the State Savings Bank of Council Bluffs, Iowa, and twenty-five shares of stock in the State Savings Bank of Council Bluffs, Iowa, which stock was represented by two certificates which were in the possession of Mr. Culver in Kansas at the time of his death. The certificates have since his death remained in Kansas in the hands of his administratrix. This proceeding was instituted for the purpose of assessing a collateral inheritance tax, and upon a hearing the district court found that the amount of cash on deposit in the bank of Council Bluffs was subject to such tax, but held that the twenty-five shares of stock in the bank owned by the decedent were not subject to such tax. The plaintiff appeals, and the correctness of the finding as to the bank stock is the only question we have for determination.
Section 1467 of the Code Supplement of 1907 provides as follows, so far as the same is material here: "All property within the jurisdiction of this state, and any interest therein, whether belonging to the inhabitants of this state or not and whether tangible or intangible, which shall pass by will or by statutes of inheritance of this or any other state, or by deed, grant, sale or gift made or intended to take effect in possession or in enjoyment after the death of the grantor or donor, to any person in trust or otherwise, . . ." except to direct heirs and charitable, and educational institutions, etc., shall be subject to a tax of five per centum of its value. The State Savings Bank of Council Bluffs is a corporation organized under the laws of Iowa and located and doing business within the state. That the bank itself is within the jurisdiction of the state of Iowa will hardly be questioned. It is a general and familiar rule that a corporation is under the jurisdiction and control of the state of its domicile. The state directs the manner and form of its organization. It exercises supervisory power over it during its existence, and finally directs the manner of its dissolution.
The concrete question before us, then, is whether the interest of the decedent in the bank and its business is subject to the collateral inheritance tax of this state, notwithstanding the fact that his domicile was in another state, and that such interest was represented by certificates of stock which were in his possession at his domicile. The question has not heretofore been determined by this court. In Gilbertson v. Oliver, 129 Iowa 568, 105 N.W. 1002, relied upon by the appellee, no bank or other corporation stock was involved, for while Mrs. Whiting died the owner of shares of stock in the Onawa Bank of Iowa, which were devised to collateral heirs, the inheritance tax on such shares was paid without a contest. The entire discussion therefore related to evidences of debt and securities therefor, other than corporate shares of stock. In Judy v. Beckwith, 137 Iowa 24, 114 N.W. 565, it was held that shares of stock in a foreign corporation, owned by a resident of this state, were subject to general taxation here. The collateral inheritance tax was not under consideration in that case, and hence it is not authority for the appellee's claim in this case, unless it be held that, because shares of stock in a foreign corporation are subject to general taxation in this state on account of their personal character, a nonresident owner of shares of stock in an Iowa corporation has no property, "or interest therein," in said corporation which is subject to pay a collateral inheritance tax to this state. While negotiable instruments, certificate of deposit, and other evidences of debt held by a nonresident of the state are not subject to the collateral inheritance tax, we think the nonresident owner of shares of stock in a domestic corporation has an interest in the property of said corporation which is subject to the tax. Generally speaking, a "share of stock" in a corporation Cook's Corporations (2d Ed.), section 5; Plimpton v. Bigelow, 93 N.Y. 592. In Fisher v. Essex Bank, 71 Mass. 373, 5 Gray 373, Chief Justice Shaw defined a "share" of corporation stock as follows: "The right is, strictly speaking, a right to participate, in a certain proportion, in the immunities and benefits of the corporation; to vote in the choice of their officers, and the management of their concerns; to share in the dividends of profits, and to receive an aliquot part of the proceeds of the capital on winding up and terminating the active existence and operations of the corporation." It may be said that the authorities generally hold that "a share of stock is a proportional part of certain rights in the management and profits of the corporation during its existence, and in the assets upon dissolution." Cook, supra; Rumball v. Metropolitan Bank, L. R. 2 QB 194; Judy v. Beckwith, supra.
It follows from the foregoing definitions that shares of stock represent an interest in the earnings and property of the corporation, and that a certificate is not stock itself, but only a convenient representation of it, for one may be a stockholder without having a certificate issued to him. The Judy-Beckwith case recognized the interest of the shareholder...
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