Ohio Valley Bldg. v. County Court Of Cabell County.
| Decision Date | 16 December 1896 |
| Parties | Ohio Valley Building & Loan Asso'n v. County Court of Cabell County. |
| Court | West Virginia Supreme Court |
Building & Loan Associations Assessment of Building Associations..
Building and loan associations are not to be assessed with a capital stock. The members are to be assessed with their shares.
V. B. Archer and Simms & Enslow for plaintiff in error, cited Const, Art. XI, s. 2; Code, c. 53, s. 1; Code, c. 54, ss. 2, 3, 25, 26, 27, 28, 29, 81a; 2 Bouv.Law, Diet. 267, "Owing;" 18 Am. & Eng. Enc. Law, 408, 409; 126 Y. 433; 95 U. S. 679; 3 Wall. 573; 9 Wall. 553; Thomp. Corp. Vol. I, § 1065 et seq.; Cook, Stock, §§ 563-565, 567; Thomp. Corp. Vol. II, § 2811; Code, c. 29, s. 64; 141 Ind. 677; Const. Art. X, s. 1; 12 Iowa, 531; 28 Iowa, 370; Cooley, Tax. p. 165; 46 K H. Rep. 389.,
George J. McComas for defendant in error, cited Code, c. 29, s. 64; 28 W. Va. 264; 38 W. Va. 338; 19 Kan. 587; 36 W. Va. 341; 41 W. Va. 658; Const. Art. VIII, s. 3; 20 S. E. Rep. 526.
The Ohio Valley Building & Loan Association, having been assessed by the assessor of Cabell county with taxes on a certain amount of personal property, applied to the county court to correct the assessment, and, that court having reduced the amount for taxation, it appealed to the circuit court, which, while further reducing it, yet held it liable to assessment with a certain amount, and the association obtained this writ of error.
The amount assessed with taxes is made up by including a certain sum as the value of the capital ejmployed by the association in business; and it claims that it is not chargeable at all with any amount as for its capital, and thus the question is not one of mere valuation of property, as in Macldn v. CoiCnty Court, 38 W. Va. 338 (18 S. E. 632) but one of right to tax the taxability of the supposed capital; and so we have jurisdiction. Charleston $ S. Bridge Co. v. Kanawha County Court, 41 W. Va. 658 (24 S. E. 1002); State v. South Penn Oil Co., 42 W. Va. 81 (24 S. E. 688). The right to impose this taxation must rest on Code, c. 29, s. 64, requiring the assessor to ascertain from officers of corporations "the actual value of the capital employed or invested by them in their trade or business." Code, c. 53, s. 1, defines a joint stock company as one "having a joint stock or capital divided into shares owned by the stockholders." Has this corporation a joint stock in other words, a capital? Here it may clear our thoughts to remember that capital is one thing, but the stock of the individual shareholder, commonly called ''stockholder," is another. The capital stock is the solid sum of money in the aggregate of the sums paid in by subscribers to the capital, to enable it to carry on the corporate business, in whatever manner engaged or invested; whereas the stockholder has a number of shares, constituting only an undivided interest in the capital, entitling him only to a dividend in the profits of its business, but not to a part of the capital while it endures, and to his proportionate share in its capital on dissolution after debts paid. The capital belongs to the corporation as an artificial being, and no stockholder has any right to a dollar of it any more than a stranger. This will appear from that latest and greatest work on corporations, Thompson's Commentaries on the Law of Corporations (sections 1060, 1065) and Farrington v. Tennessee, 95 IT. S. 679. This taxation, under section 64, is limited to capital, and is assessed against the corporation. To be taxed, it must have that which is in law capital, for the corporation can not be taxed with the shares of the stockholder, nor the shareholder with the capital. Thomp. Corp. § 2811. Taxes on property are assessed on a person, natural or artificial, not as such, but only in respect to property owned by such person; and, if that person does not own the property, that person can not be taxed.
Let us look at the character of building associations under Code, c. 54. It is a peculiar corporation, markedly different from the ordinary joint stock company. It has the right to sell to its stockholders bidding the highest premiums, the money accumulated from time to time. How does this money accumulate? By collecting from stockholders periodical dues upon shares of its stock, and interest collected from members to whom loans are made that is, interest on the par value of the shares so loaned and by imposing fines for failure to pay periodical clues, or comply with any other obligation or duty to the corporation. I see no provision for income otherwise; no provision for loans to others than members; no provision for other business than by such membership, and, as flowing from it, the right to borrow of its money, "to encourage industry, frugality, and home building and saving among its members." It has no business save this. It does not carry on commercial or manufacturing business. Persons associate, take shares, pay them in small dues from time to time, borrow this same money to build homes with, mortgaging it, and discharging the mortgage in a certain period by such payments. The object is not to make gains by way of profits. The shares do not participate in profits distributed as dividends, nor at dissolution do they participate in assets. And there is a feature differing from...
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