St. Louis Mut. Life Ins. Co. v. Charles

• Court: Missouri Supreme Court
• Writing for the Court: BLISS
• Citation: St. Louis Mut. Life Ins. Co. v. Charles, 47 Mo. 462 (Mo. 1871)
• Decision Date: 31 March 1871
• Parties: THE ST. LOUIS MUTUAL LIFE INSURANCE COMPANY, Appellant, v. BENJAMIN CHARLES, Respondent.

47 Mo. 462

THE ST. LOUIS MUTUAL LIFE INSURANCE COMPANY, Appellant,

v.BENJAMIN CHARLES, Respondent.

Supreme Court of Missouri.

March Term, 1871.

Appeal from St. Louis Circuit Court.

Cline, Jamison & Day, for appellant.

The appellant is a stock corporation organized under a charter given it by the State of Missouri in 1861, with a capital stock of the par value of $100,000, all paid up. This stock was regularly listed and taxed for the year 1866 for city, county, State and school purposes, and duly paid by the corporation. In addition to this there was assessed for said year against said corporation a tax upon all property owned by it, consisting of money loaned and on hand, amounting to the sum of $300,000. This was upon its face a void tax bill, and the seizure of the property of appellant by the collector under color of his office, to satisfy the bill, constitutes him a trespasser, and made him liable to respond in damages to the corporation for the injury done by taking its property. The taxes of 1866 were assessed and levied under the revenue law approved February 4, 1864 (Sess. Acts 1863-4, p. 65, § 1). It seems to be the intention of the Legislature to tax the stock of all incorporated companies as a representation of the capital or assets of the company; and as the stock of this company represents the entire value of its property, it was a violation of the foregoing law to levy a tax on the stock and at the same time upon all its assets, which are represented by the stock, and went in to make up and constitute its value. This was double taxation, and contrary to the spirit and intent of the act under which it was levied. It may sometimes happen that it is impossible to avoid what is or appears to be double taxation, but this can never be tolerated unless clearly authorized by the law under which it is levied. This act does not purport to require at the hands of the assessor any such hardship. No property represented by the stock of the company is permitted to be taxed. In this case the stock represents the entire property of the company, and all that is not used to pay the liabilities of the company belongs and will go to the stock-owners in the ratio of the number of shares owned by them, and the shares of stock would be taxed in accordance with their value in like manner as other personal property is taxed. (State v. Hann. & St. Jo. R.R. Co., 37 Mo. 265; St. Louis Building & Savings Institution v. Lightner, 42 Mo. 421; State, to use, etc., v. Schacklett et al., 37 Mo. 280.)

H. B. Johnson, H. A. Clover, and L. Gottschalk, for respondent.

I. The property of plaintiff is liable to taxation. (Const. of Mo., art. I, § 30; art. II., § 16; 2 Wagn. Stat. 1159, §§ 1, 2.)

II. For the purposes of this case we may admit the general proposition, that the taxation of both the property and capital stock of a corporation is double taxation, and therefore illegal and unjust. (Hann. & St. Jo. R.R. Co. v. Shacklett, 30 Mo. 550; State v. Hann. & St. Jo. RR. Co., 37 Mo. 263; Gordon v. Mayor, etc., of Baltimore, 5 Gill. 231; McCullough v. Maryland, 4 Wheat. 316; Bank v. Mumford, 4 R. I. 478; Providence Ins. for Savings v. Gardiner, id. 484; The Tax Cases, 12 Gill & Johns. 117; The State v. Branniso, 3 Zabr. 485; The State v. Bentley, id. 540; The State v. Ferris, id. 546; Salem Iron Factory v. Inhabitants of Danvers, 10 Mass. 518; Smith v. Burley, 9 N. H. 427; Bangor & Pisgah R.R. Co. v. Harris, 22 Me. 533.)

III. But the capital stock represents only such property as the corporation is authorized by its charter to hold for the transaction of its business. (Rome R.R. Co. v. Mayor, etc., of Rome, 14 Ga. 275; Mayor, etc., of Baltimore v. Baltimore & Ohio R.R. Co., 6 Gill. 288; Hann. & St. Jo. R.R. Co. v. Shacklett, 30 Mo. 550; State v. Flavelle, 4 Zabr. 310; State v. Mansfield, 3 Zabr. 510; Inhabitants of Worcester v. Western R.R. Co., 4 West, 564.)

IV. The taxation of the property of a corporation, as in this case, not held, used or needed for the transaction of its business, is lawful and proper, even though the capital stock had been also taxed. (State v. City of Newark, 1 Dutch. 315; State v. Newark, 2 Dutch. 519; State v. City of Elizabeth, 4 Dutch. 103;Tatem v. Wright et al., 3 Zabr. 429; State v. Commissioners of Mansfield, id. 510; State v. Flavell, 4 Zabr. 370; Vermont Central R.R. Co. v. Burlingham, 28 Verm. 193; Railroad v. Berks County, 6 Penn. St. 70; Southegan Nail Factory v. McConihe, 7 N. H. 309; 2 Am. Railw. Cas. 306; Inhabitants of Worcester v. Western R.R. Co., 4 Mich. 564; Lehigh Coal & Iron Co. v. Northampton Co., 8 Watts & Serg. 334; State v. Ross, 4 Zabr. 497; the E. A. R.R. Co. v. E. C. R.R. Co., 73 E. C. L. 775; Mayor of Norwich v. Norfolk R.R. Co., 82 E. C. L. 397.)

BLISS, Judge, delivered the opinion of the court.

The defendant was tax collector of St. Louis county, and this action was brought against him to recover back the amount of taxes collected of the plaintiff. The petition alleges that the capital stock of plaintiff was $100,000, all paid in, and that the tax assessment was upon $300,000, being for money loaned and on hand belonging to the plaintiff; that the company paid the same under protest, and charges “that, under the laws of the State of Missouri, no property of the said plaintiff is liable or subject to taxation for any purpose; that the said capital stock ($100,000) alone of said plaintiff is subject or liable to taxation under the laws.”

The assessment was made under the revenue act of February 4, 1864 (Sess. Acts 1863-4, p. 65), which provides (§ 1) for the taxation “of shares of stock in banks and other incorporated companies,” and of “property owned by incorporated companies over and above their capital stock.” This was probably an erroneous assessment, but not for the reasons set forth in the petition, for it is not true that only the nominal stock could have been assessed. It is often the case, and the petition shows it to have been so in this instance, that the nominal stock, or the amount actually paid in by the stockholders, represents but a part only of the capital stock of the company. This company had, by its own showing, acquired at least three times the amount of its original stock, all of which in private hands would have been subject to taxation. There was no law that exempted it in the hands of the company.

It might have been erroneously assessed, and perhaps should have been considered in valuing the stock in the hands of the shareholders. In that case the stock itself would have been valued at least at $300,000, for it represented so much taxable property. Or perhaps a portion of this amount was held by the plaintiff “over and above its capital stock.” Upon...