§ 1091. Taxation of foreign corporations.-When a corporation enters the jurisdiction of a state foreign to that of its creation, it subjects itself to all the laws of such other state, including the taxing laws.

It is well settled that the term "citizens," as used in the fourteenth amendment to the federal constitution, has no application to corporations so as to make it obligatory upon a state to give equal privileges and immunities to a foreign corporation with those given to corporations of its own creation or to individuals. A corporation's franchises have no extra-territorial validity except by comity. When a corporation, through its agents, claims the rights conferred by the laws of a state other than that from which it derived its franchises to carry on its business therein and such right is given it, it carries with it all the conditions annexed to it or which may be added by reason of changes in the laws. Among such conditions is the right to the enforcement of tax laws, and to make future changes in the same.1

1 Western Un. Tel. Co. v. Lieb, 76 Ill. 172; Ducat v. Chicago, 10 Wall. 410; Lafayette Ins. Co. v. French, 18 How. 407; Liverpool Ins. Co. v. Massachusetts, Ib. 566; Same v. Mayer, 28 Ohio St. 521; Home Ins. Co. v. Davis, 29 Mich. 238; Doyle v. Continental Ins. Co., 94 U. S. 535; Oliver v. Liverpool, etc., Life Ins. Co., 100 Mass. 531; International Tr. Co. v. L. & Tr. Co. (Mass.), 26 N. E. 693; People v. Horn S. M. Co., 105 N. Y. 76; 11 N. E. 155; Slaughter v. Ins. Co., 13 Gratt. 767; Tatem v. Wright, 23 N. J. (3 Zab.) 429; Insurance Co. v. Com., 5 Bush Ky. 68; State v. West. Un. Tel. Co., 73 Me. 518; Commonwealth v. Gloucester Ferry Co., 98 Pa. St. 105. A common example of this is seen in the matter of regulating life and fire insurance by foreign companies. The states may and generally do impose upon them burdens and exactions in addition to a discriminating tax, and require the assumption and payment of the same as conditions precedent to the right to transact business, although compliance with no such conditions is required of domestic insurance companies. Thus it was held that a non-resident insurance company might be required to pay an annual tax to a charitable institution and that such institution might be authorized to collect the same. Fire Dept. v. Noble, 3 E. D. Smith, 440. The New York, Lake Erie & Western R. R. Co., a foreign corporation, was permitted by acts Pa., Feb. 16, 1841 (P. L. 28), and March 26, 1846 (P. L. 179), to build a portion of its road in the state on payment of $10,000 annually to the state after its completion. Held, that act June 30, 1885, § 4, taxing the indebtedness of corporations doing business in the state, and compelling them to

But a state may not tax the capital stock of a foreign corporation owned by non-residents simply because it has agents and property within the state, unless it does business within the state.1

§ 1092. The "situs " of the property controls.—The situs of the property upon which a disputed tax has been laid usually determines where it is subject to state taxation. Where a railroad track and roadway extends

collect such tax, applied to such company, and did not impair the obligation of the contract between the state and the corporation, as set forth in the above private statutes. N. Y. L. E. & W. R. Co. v. Commonwealth (Pa.), 18 A. 412; Id. 414; 25 W. N. C. 25, 27.

1 People v. Am. Bell Tel. Co., 117 N. Y. 241, holding that to constitute "doing business" within the state it is not sufficient that it receives from local companies as compensation for the use of instruments at its office in another state a royalty payable monthly, without regard to whether the instruments are used or not, not having any direct business relations with the public although it is a stockholder in such local companies. See also, Com. v. Tel. Co., 129 Pa. St. 217. Where, however, the officers of a mining company had their residence in New York, and all its books were there and its silver bullion was all sold, and the proceeds too, and there it was held to be doing business within Laws of New York, 1880, c. 542, § 3, imposing a tax upon corporations organized in, under the laws of other states and doing business in New York. People v. Horn Silver Min. Co., 105 N. Y. 76; 11 N. E. 155. To same effect, So. Cotton Oil Co. v. Wemple, 44 F. 24.

Shares in mining corporations, constituted under the Laws of California, but whose tangible property is situated in another state, are taxable in California; SHARPSTEIN and MCKINSTRY, JJ., dissent. City and County of San Francisco v. Flood (Cal.), 2 P. 264, 409; Same v. Phelan (Cal.), 2 P. 402; Same v. Sharon, Id.; Same v. Baldwin (Cal.), 2 P. 410.

An assessment to "Sulphur Bank Quicksilver Mining Co., F. Fiedler, agent," is a sufficient assessment to the company of its property, and the reference to "F. Fiedler, agent," was not an assessment to him, but a mere reference in the assessment to him as agent of the company. Lake Co. v. Sulphur B'k Quicksilver Min. Co., 68 Cal., 14; 8 P. 593.

Where the stock in a mining corporation is assessed to the stockholders for the respective shares held by them, the assessment of the tangible property of the corporation and the payment of the taxes thereon does not relieve the stockholders from liability to pay taxes on the excess of the valuation of the entire stock over the valuation of the tangible property of the corporation. Ryan v. Commrs. Leavenworth Co., 30 Kan. 185; 2 P. 156.

2 The revenue officers of a county through which Pullman sleeping cars, operated by a railroad company under a contract with the car company, which is a non-resident corporation, with no place of business in the state, pass, have no jurisdiction to assess and tax such cars. Carlile v. Pullman Palace Car Co., 8 Colo. 320; 7 P. 164.

into or through two or more states, the portion in each state is taxable there.

$ 1093. Taxation of shares of capital stock and of property or corporation distinguished." The legal property of the shareholder is quite distinct from that of the corporation, although the shares of stock have no value save that which they derive from the corporate property and franchise, and a tax levied upon the property of the one is not, in a legal sense, levied upon the property of the other."1 "The moneyed capital of a bank is an entirely different thing from its capital stock. The former is the property of the corporation. It may consist of cash or bills discounted, or be in part invested in real estate or in the securities of the federal government. In whatever form it is invested, it is owned by the bank as a corporate entity and not by the stockholders."2

Still it is entirely proper to estimate the capital stock by the aggregate value of the shares in laying tax upon capital stock; and the franchise may be valued in the same way. The fact that the corporation is required to pay a tax assessed upon a share valuation does not alter its character from a tax upon shares.5

This rule has been very serviceable to states whose policy it was to tax non-resident holders of stock in domestic corporations ; and the state may give the

1 Porter v. T. T. I., etc., R. Co., 76 Ill. 561. See also, Farrington v. Tenn., 95 U. S. 679; Delaware R. R. Tax, 18 Wall. 206, 230; Quincy Bridge Co. v. Adams Co., 88 Ill. 615.

2 North Ward Nat. B'k v. City of Newark, 39 N. J. L. 380.

N. O., etc., R. Co. v. B'd of Assessors, 32 La. Ann. 19; State B'k of Va. v. Richmond, 79 Va. 113. See also, Whitney v. City of Madison, 23 Ind. 331; Wright v. Stelz, 27 Ind. 338.

Atty.-Gen. v. Bay State Min. Co., 99 Mass. 148; Commonwealth v. Hamilton Mfg. Co., 94 Mass. 298; Hamilton Co. v. Mass., 6 Wall. 632.

5 Nat. B'k v. Com., 9 Wall. 353, 360.

See Cooley on Taxation (2d Ed.) 433, citing Maltby v. Reading R. R. Co.,

corporation a lien upon the stock for the debt created by its payment of the tax.1

But notwithstanding the hardships and injustice of the rule, it is well settled that in addition to the tax upon the stock by the state wherein the corporation resides, the state of the stockholders' residence may assess and collect an additional tax upon them. This is upon the principle that shares of stock are personal property, having a situs at the place of the owner's residence, and distinct from the corporate property, franchises and capital stock.3

§ 1094. The policy of certain states.-In New York, Pennsylvania, Texas and New Jersey a more just and liberal policy has been formulated into statutes. In these states and in California (except with respect to resident shareholders in non-resident corporations in the state last mentioned and stockholders in banking corporations generally in the others), the shares are

52 Pa. St. 140; American Coal Co. v. Alleghany County, 59 Md. 185; Relfe v. Life Ins. Co., 11 Mo. App. 374; Ottawa, etc., v. McCaleb, 81 Ill. 556; Haight v. R. R. Co., 6 Wall. 15; New Orleans v. Savings, etc., Co., 31 La. Ann. 826; Barney v. State, 42 Md. 480; Nat. B'k v. Com., 9 Wall. 353; Baltimore v. City Passenger R. Co., 57 Md. 31; Leonberger v. Rowse, 43 Mo. 678; U. S. v. R. R. Co., 17 Wall. 322; St. Albans v. Nat. Car Co., 57 Vt. 68; Minot v. R. R. Co., 18 Wall. 206; McVeagh v. Chicago, 49 Ill. 318; First Nat. B'k v. Fancher, 48 N. Y.

524.

1 North Ward Nat. B'k v. City of Newark, 39 N. J. L. 380; Raleigh, etc., R. R. Co. v. Conner, 87 N. C. 414.

2 Ogden v. City of St. Joseph, 90 Mo. 522; 3 S. W. 25; Great Barrington v. County Commrs., 33 Mass. 572; McKeen v. County of Northampton, 49 Pa. St. 519; Seward v. City of Rising Sun, 79 Ind. 351; Worth v. Commrs., 82 N. C. 420; s. c. 90 N. C. 409; Dyer v. Osborne, 11 R. I. 321; Whitesell v. Boston, 12 Allen, 526; Dwight v. Boston, 12 Allen, 316; Holton v. Bangor, 23 Me. 264; Porter v. Rockford, etc., R. R. Co., 76 Ill. 561; Smith v. Exeter, 37 N. H. 556; Cooley on Taxation (2d ed.), 57, 221.

3 Such statutes were upheld in Newark City B'k v. Assessor, 30 N. J. L. 1; State v. Hannibal & St. Joseph R. R. Co., 37 Mo. 265; Webb v. Burlington, 28 Vt. 188; Penn. Act of Apr. 29, 1844; Ogden v. City of St. Joseph, 3 S. W. Rep. 90 Mo. 522, 25; Lycoming Co. v. Gamble, 47 Pa. St. 106; Sturges v. Carter, 114 U. S. 511. See also, San Francisco v. Fry, 63 Cal. 470; Same v. Flood, 64 Cal. 504.

not taxed at all, being considered as possessing no intrinsic value beyond the corporate property represented by them on which taxes are paid separately.1

1 Newark B. Co. v. Newark, 121 U. S. 163; Gillespie v. Gaston, 67 Tex. 248; 4 S. W. Rep. 599; McKellar, etc., Co. v. Commonwealth, 10 Atl. Rep. (Pa.) 780; In re Short's Estate, 16 Pa. St. 63; Hunter's Appeal, 10 Atl. Rep. (Pa.) 429. In 1881 the following section was added to the Cal. Pol. Code, constituting sec. 3608 and repealing sec. 3640: "Shares of stock in corporations possess no intrinsic value over and above the actual value of the property of the corporation which they stand for and represent, and the assessment and taxation of such shares and also of the corporate property would be double taxation. Therefore all property belonging to corporations shall be assessed and taxed; but no assessment shall be made of shares of stock, nor shall any holder thereof be taxed therefor." See Burke v. Badlam, 57 Cal. 502; Spring Valley Water Works v. Schottler, 62 Cal. 69, 118. The following is the provision in the N. Y. Rev. Stat.: "The owner or holder of stock in any incorporated company liable to taxation on its capital shall not be taxed as an individual for such stock." See R. S. of N. Y. ch., 13, title 1, sec. 7 (p. 982, 7th Ed.); People v. Commrs., 5 Hun, 200; People v. Com. of Taxes, 4 Hun, 595; aff'd 62 N. Y. 630; In re Enston's Estate, 113 N. Y. 174; 21 N. E. Rep. 87; B'k of Republic v. County of Hamilton, 21 Ill. 54; Oswego, etc., Factory v. Dolloway, 21 N. Y. 449; People v. Home Ins. Co., 92 N. Y. 328; Same v. Williamsburgh Gas-Light Co., 76 N. Y. 202; Same v. McLean, 80 N. Y. 254; Same v. Ferguson, 38 N. Y. 89; People v. New York, etc., Co., 92 N. Y. 487; Same v. Davenport, 91 N. Y. 574; People v. Commrs., 95 N. Y. 554; Nassau, etc., Co. v. City of Brooklyn, 89 N. Y. 409; Valle v. Zeigler, 84 Mo. 214; People v. Bradley, 39 Ia. 130. Shares in joint-stock company not taxable in corporations in N. Y.; People v. Coleman, 5 N. Y. S. 394.

But such companies are taxable under act of 1880, prescribing a method of taxation, for Laws N. Y. 1880, c. 542, as amended by Laws 1881, c. 361, provides that "every corporation, joint stock company, or association whatever, now or hereafter incorporated or organized under any law of this state,' shall pay a certain tax on dividends, or, if there are no dividends. on the valuation of the capital stock; also an additional tax on the gross earnings within the state, of every corporation, joint stock company, or association, etc., engaged in transporting freight or passengers. By various statutes, joint stock companies are authorized to sue and be sued in the name of their president; not to be dissolved by the death of a stockholder, or by the assignment of his stock to purchase, hold and convey property in the name of their president; to extend their term of existence by consent of two-thirds of the members in interest; to reduce the capital stock by the action of three-fourths of the directors. The articles of agreement, under which the United States Express Co. was organized in New York, embrace all the above privileges, but contain no reference to the statutes conferring them. Held, that it is not a mere partnership, but a stock company organized under the laws of that state, and taxable under the act of 1880. People v. Wemple, 52 Hun, 434. Act Pa. 1, 1889, sec. 1 (P. L. 420), imposes a tax upon all mortgages held by "any joint stock company, associations, limited parnership, bank or corporation. Sec. 21 imposes a tax on the capital