preme court of Pennsylvania has held that | from taxation under this statute. They a tax on the value of the capital stock is a tax on the property and assets of the corporation issuing such stock. Com. v. Standard Oil Co. 101 Pa. 119, 145; Fox's Appeal, 112 Pa. 354, 4 Atl. 149; Com. v. Delaware, S. & S. R. Co. 165 Pa. 44, 30 Atl. 522, 523. This court has also frequently held that a tax on the value of the capital stock of a corporation is a tax on the property in which that capital is invested, and in consequence no tax can thus be levied which includes property that is otherwise exempt. New York ex rel. Bank of Commerce v. Tax Comrs. 2 Black, 620, 17 L. ed. 451; Bank Tax Case (New York ex rel. Bank of Commonwealth v. Tax & A. Comrs.) 2 Wall. 200, 17 L. ed. 793; Pullman's Palace Car Co. v. Pennsylvania, 141 U. S. 18, 25, 35 L. ed. 613, 617, 3 Inters. Com. Rep. 595, 11 Sup. Ct. Rep. 876; Fargo v. Hart, 193 U. S. 490, 498, 499, 48 L. ed. 761, 764, 765, 24 Sup. Ct. Rep. 498. The cases of the taxation upon the value of the capital stock of the banks, or on a valuation equal to the amount of their capital stock paid in or secured to be paid in, as reported in 2 Black and 2 Wall., supra, involved the question of the taxation of United States bonds and other securities of the United States, in which the capital of the banks was invested, which were exempt from taxation; but the holding of the court was that those bonds and securities were in fact taxed by a tax upon the value of the capital of the bank, which was invested in such bonds and securities. Of course, the distinction between the capital stock of a corporation, and the shares into which it may be divided and held by individual shareholders, is borne in mind and recognized, and nothing herein affects that distinction. The question here is simply as to the value of the capital stock with reference to the assessment and taxation upon the corporation itself which issues it, and has nothing to do with the individual shareholder. Van Allen v. Assessors (Churchill v. Utica, 3 Wall. 573, 18 L. ed. 229; Bank of Commerce v. Tennessee, 161 U. S. 134-146, 40 L. ed. 645649, 16 Sup. Ct. Rep. 456. Counsel for defendant in error find no fault with the principle stated in Brown v. Houston, 29 L. ed. 257, 5 Sup. Ct. Rep. 1091, and that line of cases, nor with the general proposition laid down in the other cases cited, that a tax on the value of the capital stock is a tax on the property of the corporation in which the capital is invested. They deny, however, their applicability to the facts of this case. They concede that the courts of Pennsylvania have held that tangible property, permanently located outside of the state, for the use and benefit of the corporation, and owned by it, is exempt 25 S. C.-43. also concede that it was never within the intent or the power of the legislature to impose a tax upon tangible property when held outside of the territorial limits of the state; but they insist that this tax is not eo nomine or specifically upon tangible property outside the state, and they contend that the state has the right to consider the value of the coal as having entered into the value of the capital stock as soon as it was mined, and that the state then had the right to treat the coal as one of the items that went into the value of the capital stock, just the same as they contend for the right to so treat the money realized from the coal upon its sale in the foreign state when it has been returned to the state, and has gone into the surplus fund. The position of the defendant in error, then, is this: The tax in question is not a tax upon coal, treated as tangible property and a tangible asset, specifically subject to tax, but is a tax upon the value of the capital stock of the Pennsylvania corporation at the fixed rate of 5 mills for each dollar of the actual value of the whole capital stock, including bonds, mortgages, moneys at interest, franchises, and property of other kinds, and that the statute in question does not impose a tax on the coal itself. Counsel do not contend that a tax on the value of the capital stock of a corporation is not a tax on its property in a certain sense, but they contend that, while a tax on capital stock is a property tax, yet the property of the corporation, for the purpose of taxation, is reached through the tax imposed directly upon the stock (197 Pa. 553, 47 Atl. 740), and that there is a distinction between a tax on capital stock and a direct tax on personal property. Therefore tangible property situated outside the state, under the circumstances set forth in this case, is not directly taxed by a tax on the value of the capital stock, or, at least, there is no specific tax upon it, and the tax is not illegal. It is also said that, by reason of the alleged transitory character of the coal, it has never, in law, lost its original domicil, which still remains in Pennsylvania, and is subject to be there included in the value of the capital stock of the corporation. The asserted transitory nature of this property does not seem to us to be material. At the time of the appraisement it had been transported beyond the jurisdiction of the state, never to return in kind, but was intended to be sold in the foreign state. Such property is entirely unlike the property involved in Com. v. American Dredging Co. 122 Pa. 386, 1 L. R. A. 237, 2 Inters. Com. Rep. 221, 9 Am. St. Rep. 116, 15 Atl. 443. That property consisted of vessels, or scows, or tugs, only temporarily out of the state of | sents that property, and from which the Pennsylvania, for the purpose of engaging stock obtains its increased value? Can the in business, and liable to return to the state mere name of the tax alter its nature in at any time, and was without any actual such case? If so, the way is found for taxsitus beyond the jurisdiction of the state it- ing property wholly beyond the jurisdiction self. However temporary the stay of the of the taxing power by calling it a tax on coal might be in the particular foreign the value of capital stock, or something else states where it was resting at the time of which represents that property. Such a the appraisement, it was definitely and for- tax, in its nature, by whatever name it may ever beyond the jurisdiction of Pennsylva- | be called, is a tax upon the specific property nia. And it was within the jurisdiction of which gives the added value to the capital the foreign states for purposes of taxation, stock. and in truth it was there taxed. We regard this tax as, in substance and fact, though not in form, a tax specifically levied upon the property of the corporation, and part of that property is outside and beyond the jurisdiction of the state which thus assumes to tax it. This is not a question as between direct or indirect taxation, such as arises under the Federal Constitution when Congress lays and collects taxes by virtue of the power given it by that instrument. No question of uniformity or apportionment of taxes arises here. The question now discussed is simply whether, under this statute of the state, property of the corporation is, in substance and effect, taxed while it is beyond the jurisdiction of the state, and is never to return. When the Federal Constitution says no tax or duty shall be laid on articles exported from any state, such articles cannot be taxed, directly or indirectly, and a tax on foreign bills of lading is void because it, in effect, is a tax on exports. Fairbank v. United States, 181 U. S. 283289, 45 L. ed. 862-865, 21 Sup. Ct. Rep. 648. So, if the state cannot tax tangible property permanently outside the state, and having no situs within the state, it cannot attain the same end by taxing the enhanced value of the capital stock of the corporation which arises from the value of the property beyond the jurisdiction of the state. was. We think the state court is right in deducting, as it does, the value of the tangible property, when permanently held in another state, and we think that for the same reason the same rule should obtain in the case of tangible property situated as this coal We cannot see the distinction, so far as the question now before the court is concerned, between a tax assessed upon property, eo nomine, or specifically, when outside the state, and a tax assessed against the corporation upon the value of its capital stock to the extent of the value of such property, and which stock represents, to that extent, that very property. If the property itself could not be specifically axed, because outside the jurisdiction of the state, how does the tax become legal by providing for assessing the tax on the value of the capital stock to the extent it repre Although the coal may have entered into the value of the capital stock when mined, the question is whether the value of the stock in November, 1899, when the appraisement was directed by the statute to be made, should not be decreased by deducting the value of the coal therefrom which was not in the state at the time of the appraisement. We think it should; otherwise the tax amounts in substance to a specific tax on the coal. Taking the different prices of the stock at different times in the year, and the average price thereof, and otherwise following the provisions of the statute, simply makes a way of finding the value of the stock between the 1st and 15th of November in each year. That is the material time when the value is to be ascertained, and at that time this coal was not in the state. An appraisement thus made, which includes such property, is, to that extent, without jurisdiction, and illegal. It is true that, in general, an appraisement of, or an assessment of a tax upon, value, is a decision upon a question of fact, and a difference of opinion as to the value between the assessing officer and the court is immaterial, and the decision of the former is final. But where the appraisement is arrived at by including therein tangible property which is beyond the jurisdiction of the state, and which, therefore, the assessing officers had no jurisdiction to appraise (and none could be given them by the statute), such an appraisement or assessment is absolutely illegal, as made without jurisdiction. would The next question is whether there is a right to relief in a case like this, founded upon the provisions of the Federal Constitution. We think there is. The collection of a tax under such circumstances amount to the taking of property without due process of law, and a citizen is protected from such taking by the 14th Amendment. In Louisville & J. Ferry Co. v. Kentucky, 188 U. S. 385, 47 L. ed. 513, 23 Sup. Ct. Rep. 463), the ferry company was operating a ferry across the Ohio river between Jeffersonville, in Indiana, and Louisville, in Kentucky, under two franchises, one granted by the proper authorities of Indiana for main'taining a ferry across that river from the Indiana shore to the Kentucky shore, and the other granted by the state of Kentucky to carry on a ferry business from the Kentucky to the Indiana shore. The tax was laid by Kentucky upon the company, a part of which the company insisted was a tax upon it by reason of its ownership of the Indiana franchise, which it contended was property situated in Indiana, and beyond the jurisdiction of Kentucky. The courts of Kentucky held that, under the statute, "the board of valuation and assessment did not attempt to assess or tax its revenues coming from the exercise of its franchise in the transportation of persons and property over the Ohio river. But under certain sections of the Kentucky statutes it assessed the value of appellant's franchise, which is its intangible property. The board did not assess, or attempt to assess, the property, either tangible or intangible, which it owned in the state of Indiana." This court stated: "It thus appears from the admitted facts and from the opinion of the court below that the state board, in its valuation and assessment of the franchise derived by that company from Kentucky, included the value of the franchise obtained from Indiana for a ferry from its shore to the Kentucky shore. In short, as stated by the court of appeals, the value of the franchise of the ferry company was fixed 'as if it conducted all its business in the territorial limits of the state of Kentucky,' making no deduction for the value of the franchise obtained from Indiana." It was held that the franchise granted by Indiana to maintain a ferry from the Indiana shore was wholly distinct from the franchise obtained from Kentucky to maintain the ferry from the Kentucky shore, although the enjoyment of both was essential to a complete ferry right for transportation of persons and property across the river both ways. And each franAnd each franchise was property entitled to the protection of the law. After holding that the privilege of maintaining a ferry in Kentucky from the Indiana shore to the Kentucky shore was a franchise derived from Indiana, and as that franchise was a valuable right of property, the question arose whether it was within the power of Kentucky to tax it, directly or indirectly, and this court said: "It is said that the Indiana franchise has not been taxed, but only the franchise derived from Kentucky; that the tax is none the less a tax on the Kentucky franchise, because of the value of that franchise being increased by the acquisition by the Kentucky corporation of the franchise granted by Indiana. This view sacrifices substance to form. If the board of valuation and assessment, for purposes of taxation, had separately valued and assessed at a given sum the franchise derived by the ferry company from Kentucky, and had separately valued and assessed at another given sum the franchise obtained from Indiana, the result would have been the same as if it had assessed, as it did assess, the Kentucky franchise as an unit upon the basis of its value as enlarged or increased by the acquisition of the Indiana of the Indiana franchise." And again: "We recognize the difficulty which sometimes exists in particular cases in determining the situs of personal property for purposes of taxation, and the above cases have been referred to because they have gone into judgment, and recognize the general rule that the power of the state to tax is limited to subjects within its jurisdiction, or over which it can exercise dominion. No difficulty can exist in applying the general rule in this case; for, beyond all question, the ferry franchise derived from Indiana is an incorporeal hereditament, derived from and having its legal situs in that state. It is not within the jurisdiction of Kentucky. The taxation of that franchise taxation of that franchise or incorporeal hereditament by Kentucky is, in our opinion, a deprivation by that state of the property of the ferry company, without due process of law, in violation of the 14th Amendment of the Constitution of the United States; as much so as if the state taxed the real estate owned by that company in Indiana." And in conclusion it was said: "We decide nothing more than it is not competent for Kentucky, under the charter granted by it, and under the Constitution of the United States, to tax the franchise which its corporation, the ferry company, lawfully acquired from Indiana, and which franchise or incorporeal hereditament has its situs, for purposes of taxation, in Indiana.” It is plain that in the case at bar the coal had lost its situs in Pennsylvania by being transported from that state to foreign states for the purposes of sale, with no intention that it should ever return to its state of origin. It was, therefore, as much outside the jurisdiction of the state of Pennsylvania to tax it as was the Indiana franchise in the case just cited, and it has been taxed just as directly and specifically under the facts stated in this case as was the Indiana franchise taxed in Kentucky by the valuation of the Kentucky franchise, which value was increased by the value of the franchise created by Indiana. Taxation of the coal in this case deprived the owner of its property without due process of law, as is held in the above case, and the owner is entitled to the protection of the 14th Amendment, which prevents the taking of its property in that way. The judgment of the Supreme Court of Pennsylvania is reversed, and the cause re manded for further proceedings not incon- | evidence heard on the complaint of the plaintiff, showing the material facts as stated in the complaint. The trial court found the facts as follows: "That the plaintiff during all the times mentioned in said complaint, to wit, from the first day of January, 1902, down to the Present time inclusive, was, has been, and now is the owner of, in possession of, and entitled to the possession of, the south half of the northwest quarter of section 24, in township 4 south of range 1, east of Salt Lake meridian, in Utah county, state of Utah. "That Fort Canyon creek is a natural stream of water flowing from the mountains on the north of plaintiff's said land, in a southerly direction to and near to plaintiff's said land. "That said land of plaintiff above described is arid land and will not produce without artificial irrigation, but that, with artificial irrigation, the same will produce abundantly of grain, vegetables, fruits, and hay. "That the defendants own land lying north of and adjacent to plaintiff's said land, and said defendants have constructed Argued April 19, 20, 1905. Decided May 15, and are maintaining and jointly own a 1905. water ditch which diverts a portion of the said waters of the said Fort Canyon creek IN on N ERROR to the Supreme Court of the on the west side of said creek (being the side State of Utah to review a judgment on which the plaintiff's said land is situwhich affirmed a judgment of the District ated), at a point about one mile north of Court for the County of Utah, condemning plaintiff's said land, in section 13 of said a right of way in favor of an individual township, down to a point within a hundred landowner across his neighbor's land, for feet of plaintiff's said land, which said ditch the enlargement of an irrigation ditch to is begun on the defendants' land and runs enable him to irrigate his land. Affirmed. in a southerly direction over said defendSee same case below, 27 Utah, 158, 101 ants' land and onto and over the lands of Am. St. Rep. 953, 75 Pac. 371. the said defendants to said point about a hundred feet of plaintiff's said land. Statement by Mr. Justice Peckham: This action was brought by the defendant in error, Nash, to condemn a right of way so called, by enlarging a ditch for the conveying of water across the land of plaintiffs in error, for the purpose of bringing water from Fort Canyon creek, in the county and state of Utah, which is a stream of water flowing from the mountains near to the land of the defendant in error, and thus to irrigate his land. The plaintiffs in error demurred to the complaint upon the ground that the same did not state facts sufficient to constitute a cause of action against them. The demurrer was overruled, and the defendants then waived all time in which to answer the complaint, and elected to stand on the demurrer. Thereafter there was default entered against the defendants, and each of them, for failing to answer, and the case was, under the practice in Utah, then tried and "The plaintiff is the owner of, and entitled to the use of, sufficient of the remainder of the flow of the waters of the said Fort Canyon creek to irrigate his said land and that the irrigation of said land by the waters of said creek, and the uses of the said waters in the irrigation of the said lands of the defendant, is, under the laws of this state, declared to be, and the same is, a public use. "That the said waters of said Fort Canyon creek cannot be brought upon the said plaintiff's said land by any other route except by and through the ditch of the defendants, owing to the canyon through which said ditch runs being such as to only be possible to build one ditch. "That plaintiff has no other way of irrigating his said land except by the use of the waters of said Fort Canyon creek, and that unless plaintiff is allowed to enlarge the ditch of the defendants, and have a right in any manner interfere with the free and full use thereof by the defendants for the carrying of all waters of the said defendants." of way through said ditch for the flow of and the use thereof by the plaintiff will not the waters of said Fort Canyon creek, down to the plaintiff's said land, that said land of plaintiff will be valueless and the waters of said Fort Canyon creek will not be available for any useful purpose. Upon these facts the court found the fol "That said ditch of defendants is a small | lowingditch, about 18 inches wide and about 12 inches deep; that if the plaintiff is permitted to widen said ditch one foot more it will be sufficient in dimensions to carry plaintiff's said water, to which he is en titled, to his said land, and the same can and will be put to a beneficial and public use, in the irrigation of the soil on plain tiff's said land hereinbefore described. "Conclusions of Law. "The court finds and decides that the plaintiff is entitled to a decree of this court condemning a right of way through defendants' said ditch, to the extent of widening said ditch one foot more than its present width, and to a depth of said ditch as now constructed through the entire length thereof down to plaintiff's said land, for the purpose of carrying his said waters of said Fort Canyon creek to the land of the plaintiff for the purpose of irrigation, and is entitled to an easement therein to the extent of the enlarging of said ditch, and for the purposes aforesaid, and to have a perpetual right of way to flow waters therein to the extent of the said enlargement. "That on the 16th day of January, 1902, and while the said defendants were not in the actual use of their said ditch, and while the widening of said ditch at said time would not in any manner interfere with said defendants, other than the act of widening of same, the plaintiff requested of the said defendants the right to so widen the said ditch of the said defendants so to make it one foot wider, for the purpose of using the same to carry the water of the plaintiff on to his said land from said creek, and at said time and place offered to pay to said defendants all damages which the said defendants might suffer by reason of said enlargement, and offered to pay his proportion of the maintenance of keeping the same in repair, and asked of said defendants a right ing and keeping the said ditch in repair in to continue the use of said ditch in common with said defendants, and to use the same so as not to interfere with the use of said ditch by said defendants, and it further appearing to the court that the said plaintiff is now and has ever since been willing to pay said damage and all damage incident thereto, and to pay his just proportion of the cost of maintaining said ditch. That the said defendants then and there and ever since have refused to permit plaintiff to enlarge said ditch or to use the same, or in any manner to interfere with the same. "And it further appearing to the court that the said defendants would suffer damages by reason of the enlarging of said ditch one foot in width, in the sum of $40.00, and no more. And that the said plaintiff has deposited with the clerk of this court, to be paid to the order of the said defendants, the sum of $40.00, in full payment of such damages. That the land of the defendants not sought to be condemned by plaintiff would suffer no injury or damage. "And it further appearing from said evidence that said ditch of the defendants can be widened by the plaintiff one foot more without injury to defendants or to said ditch, and that said widening of said ditch "That the defendants are entitled to have and recover from the said plaintiff the sum of $40.00 damages for injury sustained by reason of the enlargement and improvement above stated and such right of way and easement. "That the plaintiff is required to contribute to the cost and expense of maintain an amount and proportion bearing the same pense as the waters he flows therein bears and judgment is hereby ordered to be en- Judgment having been entered upon these findings, the defendants appealed to the supreme court of the state, where, after argument, the judgment was affirmed. 27 Utah, 158, 101 Am. St. Rep. 953, 75 Pac. 371. Mr. J. W. N. Whitecotton for plaintiffs in error. No counsel for defendant in error. Mr. Justice Peckham, after making the foregoing statement, delivered the opinion of the court: The plaintiffs in error contend that the proposed use of the enlarged ditch across their land for the purpose of conveying water to the land of the defendant in error alone is not a public use, and that, therefore, the defendant in error has no constitutional or other right to condemn the land, or any portion of it, belonging to the plaintiffs in error, for that purpose. They argue |
