State v. Kidd

• Decision Date: 10 April 1900
• Citation: 28 So. 480,125 Ala. 413
• Parties: STATE v. KIDD (TWO CASES.
• Court: Alabama Supreme Court

28 So. 480

125 Ala. 413

STATE v. KIDD (TWO CASES.

Supreme Court of Alabama

April 10, 1900

Tyson J., dissenting.

Appeal from circuit court, Elmore county; A. H. Alston, Judge.

Proceedings by the state of Alabama against Louisa V. Kidd, and against Louisa V. Kidd, executrix, to enforce the collection of assessments for escaped taxes. From the judgments the state appeals. Reversed.

These two cases involve the same question, and were tried upon substantially the same facts, and on the present appeal are submitted together. The proceedings in each of the case were instituted by a report of the tax assessor of Elmore county addressed to the commissioners' court of said county, in which he reported that he had "assessed escaped taxes against Louisa V. Kidd on the following described property namely: Stocks and bonds, money, money hoarded or on deposit subject to check, draft, or order, or in safety-deposit box safe, or vault, or elsewhere. Moneyed capital, money lent, solvent credits, and credits of value, in the aggregate of the value of the sum of $150,000." The report then states that the property had escaped taxation for the years from 1893 to 1898, inclusive, and then enumerates the taxes that were due for each of said years. The report in the case against Louisa V. Kidd as executrix, etc., was the same, except that the aggregate value of the property was fixed at $200,000. Each of these reports was signed by "J. I. Plott, Tax Assessor," and was filed in the commissioners' court on December 16, 1898. Attached to each of these reports was a return list of what purported to be the assessment. Each of these assessments was a mere entry on ordinary assessment blanks used by taxpayers in making a return of their property to the tax assessor. Each of the blanks was designated, "Returned List for 1899," and it was stated that each was "List of Property and Assessment vs. Mrs. Louisa V. Kidd for the Years 1893, 1894, 1895, 1896, 1897, 1898." On the blank in the other case that list was designated as, "List of Property and Assessment vs. Louisa V. Kidd, Executrix," for the same years. On each list of assessment the property was assessed as follows: "Stocks and bonds and money hoarded or on deposit subject to check or draft or order, or in safety-deposit box, safe, or vault, or elsewhere. Moneyed capital, money lent, solvent credits, or credits of value, in the aggregate sum of $150,000.00 for years 1893, 1894, 1895, 1896, 1897, and 1898." On the list in the other case the assessment was the same, with the exception that the aggregate of the property was fixed at $200,000. In the commissioners' court, upon citation issued upon the filing of the said report by the tax assessor, Louisa V. Kidd filed separate answers in each case, in which she set up that the property sought to be taxed in said assessment was all situated in the state of New York, beyond the control of the defendant, and consisted of stocks in railroad corporations, and that the same had never been in the state of Alabama, and was not subject to taxation under the laws of Alabama. Upon the hearing in the commissioners' court there was a correction of the assessment, and, as corrected, judgment was rendered against the respondent in each of the cases. From each of these judgments separate appeals were taken to the circuit court, where the cause was tried de novo. In the circuit court the reports of the tax assessor, with the assessment lists appended to each, were introduced in evidence. The bill of exceptions does not show that there was any objection made by the defendant to the introduction in evidence of either the report or the assessment list. It was shown by the evidence introduced on the trial that the defendant's right to the property in each case was derived from H. B. Tulane, deceased, who died as the owner of the property in question; and it was further shown by the evidence that in the years covered by the assessments H. B. Tulane was the owner of certain shares of the capital stock of several foreign railroad corporations and of corporate bonds of foreign corporations; that during his life and since his death the property had been and was deposited in safety vaults in New York City. Louisa V. Kidd was shown to be a resident of the state of Alabama, and to have resided in Elmore county. Upon the introduction of all the evidence, the court, at the request of the defendant, gave the general affirmative charge in her behalf in each of the cases. To the giving of this charge the plaintiff duly excepted in each case. In each of the cases there were verdict and judgment for the defendant. The state appeals in each of the cases, and assigns as error the giving of the general affirmative charge requested by the defendant, and the rendition of judgment in favor of the defendant.

Gordon Macdonald and Parker & Golson, for the State, to sustain the proposition that the situs of shares in a corporation is, for the purpose of taxation, at the domicile of the owner of said stock, cited the following authorities: Cooley, Tax'n, pp. 22, 23, and note 1, p. 23; Burroughs, Tax'n, 188, § 90; Boyd v. City of Selma, 96 Ala. 144, 11 So. 393, and authorities cited in opinion; 1 Desty, Tax'n, pp. 62, 63, and authorities in note 1, p. 63; Welty, Assessm. p. 130, § 57; Cooley, Tax'n, 57, and notes; In re State Tax on Foreign-Held Bonds, 82 U.S. 320, 21 L.Ed. 179; Shelby Co. v. Union & Planters' Bank, 161 U.S. 149, 16 S.Ct. 558, 40 L.Ed. 650; Story, Confl. Laws, §§ 352, 399.

Gunter & Gunter and J. M. Chilton, for appellees.

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 1898, 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, subd. 2. Such property 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 tax on stock in a foreign corporation, though expressly named as taxable by the existing statute, could not be collected. That decision, however, appears to be against the weight of authority, and at variance with the principle declared by this court in Boyd v. City of Selma, 96 Ala. 144, 11 So. 393, 16 L. R. A. 729. The latter case, we think, asserts the true doctrine, 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 owner's domicile. Burroughs, Tax'n, § 50; Railroad Co. v. Morrow, 87 Tenn. 406, 11 S.W. 348, 2 L. R. A. 853, and authorities cited on this subject in appellant's brief. We are unwilling to follow the decision in Varner's 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, Tax'n, 146; Railroad Co. v Kennerly, 74 Ala. 583; Bank v. Billings, 4 Pet. 514, 7 L.Ed. 939; 25 Am. & Eng. Enc. 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. Section 453, subd. 9, and section 478. Subdivision 8 of section 451 directs that "the shares 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 has no reference to corporations having no property to list for taxation in this state. McIver v. Robinson, 53 Ala. 456. The exemption and likewise the distinction between the two classes of corporations could only have been inspired by 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 case 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 placed "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...