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preme court of Pennsylvania has held that from taxation under this statute. They a tax on the value of the capital stock is a also concede that it was never within the tax on the property and assets of the corpo intent or the power of the legislature to imration issuing such stock. Com. v. Standard pose a tax upon tangible property when held Oil Co. 101 Pa. 119, 145; Fox's Appeal, 112 outside of the territorial limits of the state; Pa. 354, 4 Atl. 149; Com. v. Delaware, S. & but they insist that this tax is not eo nomS. R. Co. 165 Pa. 44, 30 Atl. 522, 523. This ine or specifically upon tangible property court has also frequently held that a tax on outside the state, and they contend that the the value of the capital stock of a corpora- state has the right to consider the value of tion is a tax on the property in which that the coal as having entered into the value of capital is invested, and in consequence no the capital stock as soon as it was mined, tax can thus be levied which includes prop- and that the state then had the right to erty that is otherwise exempt. New York treat the coal as one of the items that went ex rel. Bank of Commerce v. Tax Comrs. 2 into the value of the capital stock, just the Black, 620, 17 L. ed. 451; Bank Tax Case same as they contend for the right to so (New York ex rel. Bank of Commonwealth treat the money realized from the coal upon v. Tax & A. Comrs.) 2 Wall. 200, 17 L. ed. its sale in the foreign state when it has 793; Pullman's Palace Car Co. v. Pennsylva- been returned to the state, and has gone into nia, 141 U. S. 18, 25, 35 L. ed. 613, 617, 3 the surplus fund. The position of the deInters. Com. Rep. 595, 11 Sup. Ct. Rep. 876; fendant in error, then, is this: The tax in Fargo v. Hart, 193 U. S. 490, 498, 499, 48 question is not a tax upon coal, treated as L. ed. 761, 764, 765, 24 Sup. Ct. Rep. 498. tangible property and a tangible asset, spe
The cases of the taxation upon the value cifically subject to tax, but is a tax upon the of the capital stock of the banks, or on a value of the capital stock of the Pennsylvavaluation equal to the amount of their cap- nia corporation at the fixed rate of 5 mills ital stock paid in or secured to be paid in, for each dollar of the actual value of the as reported in 2 Black and 2 Wall., supra, whole capital stock, including bonds, mortinvolved the question of the taxation of gages, moneys at interest, franchises, and United States bonds and other securities of property of other kinds, and that the statthe United States, in which the capital of ute in question does not impose a tax on the the banks was invested, which were exempt coal itself. Counsel do not contend that a from taxation; but the holding of the court tax on the value of the capital stock of a was that those bonds and securities were in corporation is not a tax on its property in fact taxed by a tax upon the value of the a certain sense, but they contend that, while capital of the bank, which was invested in a tax on capital stock is a property tax, yet such bonds and securities. Of course, the the property of the corporation, for the purdistinction between the capital stock of a pose of taxation, is reached through the tax corporation, and the shares into which it imposed directly upon the stock (197 Pa. may be divided and held by individual share- 553, 47 Atl. 740), and that there is a disholders, is borne in mind and recognized, tinction between a tax on capital stock and and nothing herein affects that distinction. a direct tax on personal property. ThereThe question here is simply as to the value fore tangible property situated outside the of the capital stock with reference to the as- state, under the circumstances set forth in sessment and taxation upon the corporation this case, is not directly taxed by a tax on itself which issues it, and has nothing to do the value of the capital stock, or, at least, with the individual shareholder. Van Al- there is no specific tax upon it, and the tax len v. Assessors (Churchill v. Utica, 3 Wall. is not illegal. It is also said that, by rea573, 18 L. ed. 229; Bank of Commerce v. son of the alleged transitory character of Tennessee, 161 U. S. 134-146, 40 L. ed. 645- | the coal, it has never, in law, lost its orig. 649, 16 Sup. Ct. Rep. 456.
inal domicil, which still remains in PennCounsel for defendant in error find no sylvania, and is subject to be there includfault with the principle stated in Brown v. ed in the value of the capital stock of the Houston, 29 L. ed. 257, 5 Sup. Ct. Rep. 1091, corporation. and that line of cases, nor with the general The asserted transitory nature of this proposition laid down in the other cases cit. property does not seem to us to be material. ed, that a tax on the value of the capital At the time of the appraisement it had been stock is a tax on the property of the corpo transported beyond the jurisdiction of the ration in which the capital is invested. state, never to return in kind, but was inThey deny, however, their applicability to tended to be sold in the foreign state. Such the facts of this case. They concede that property is entirely unlike the property inthe courts of Pennsylvania have held that volved in Com. V. American Dredging Co. tangible property, permanently located out- 122 Pa. 386, 1 L. R. A. 237, 2 Inters. Com. side of the state, for the use and benefit of Rep. 221, 9 Am. St. Rep. 116, 15 Atl. 443. the corporation, and owned by it, is exempt | 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 Although the coal may have entered into this tax as, in substance and fact, though the value of the capital stock when mined, not in form, a tax specifically levied upon the question is whether the value of the the property of the corporation, and part stock in November, 1899, when the appraise of that property is outside and beyond the ment was directed by the statute to be made, jurisdiction of the state which thus assumes should not be decreased by deducting the to tax it. This is not a question as between value of the coal therefrom which was not in direct or indirect taxation, such as arises the state at the time of the appraisement. under the Federal Constitution when Con- We think it should; otherwise the tax gress lays and collects taxes by virtue of the amounts in substance to a specific tax on power given it by that instrument. No the coal. Taking the different prices of the question of uniformity or apportionment of stock at different times in the year, and the taxes arises here. The question now dis-average price thereof, and otherwise followcussed is simply whether, under this statute ing the provisions of the statute, simply of the state, property of the corporation is, makes a way of finding the value of the in substance and effect, taxed while it is be- stock between the 1st and 15th of November yond the jurisdiction of the state, and is in each year. That is the material time never to return. When the Federal Consti- when the value is to be ascertained, and at tution says no tax or duty shall be laid on that time this coal was not in the state. An articles exported from any state, such arti- appraisement thus made, which includes cles cannot be taxed, directly or indirectly, such property, is, to that extent, without and a tax on foreign bills of lading is void jurisdiction, and illegal. It is true that, in because it, in effect, is a tax on exports. general, an appraisement of, or an assessFairbank v. United States, 181 U. S. 283–ment of a tax upon, value, is a decision up289, 45 L. ed. 862–865, 21 Sup. Ct. Rep. 648. on a question of fact, and a difference of
25 S. C.-43.
So, if the state cannot tax tangible prop- opinion as to the value between the assesserty permanently outside the state, and hav- ing officer and the court is immaterial, and ing no situs within the state, it cannot at the decision of the former is final. But tain the same end by taxing the enhanced where the appraisement is arrived at by invalue of the capital stock of the corporation cluding therein tangible property which is which arises from the value of the property beyond the jurisdiction of the state, and beyond the jurisdiction of the state.
which, therefore, the assessing officers had We think the state court is right in de no jurisdiction to appraise (and none could ducting, as it does, the value of the tangible be given them by the statute), such an approperty, when permanently held in another praisement or assessment is absolutely illestate, and we think that for the same rea- gal, as made without jurisdiction. son the same rule should obtain in the case The next question is whether there is a of tangible property situated as this coal right to relief in a case like this, founded
We cannot see the distinction, so far upon the provisions of the Federal Constituas the question now before the court is con- tion. We think there is. The collection of cerned, between a tax assessed upon prop
tax under such circumstances would erty, eo nomine, or specifically, when out amount to the taking of property without side the state, and a tax assessed against the due process of law, and a citizen is protected corporation upon the value of its capital from such taking by the 14th Amendment. stock to the extent of the value of such In Louisville & J. Ferry Co. v. Kentucky, property, and which stock represents, to 188 U. S. 385, 47 L. ed. 513, 23 Sup. Ct. that extent, that very property. If the Rep. 463), the ferry company was operating property itself could not be specifically a ferry across the Ohio river between Jefferaxed, because outside the jurisdiction of sonville, in Indiana, and Louisville, in Kenthe state, how does the tax become legal by tucky, under two franchises, one granted by providing for assessing the tax on the value the proper authorities of Indiana for mainof the capital stock to the extent it repre. 'taining a ferry across that river from the
Indiana shore to the Kentucky shore, and the franchise derived by the ferry company the other granted by the state of Kentucky from Kentucky, and had separately valued to carry on a ferry business from the Ken- and assessed at another given sum the frantucky to the Indiana shore. The tax was chise obtained from Indiana, the result laid by Kentucky upon the company, a part would have been the same as if it had asof which the company insisted was a tax sessed, as it did assess, the Kentucky franupon it by reason of its ownership of the In-chise as an unit upon the basis of its value diana franchise, which it contended was as enlarged or increased by the acquisition property situated in Indiana, and beyond of the Indiana
Indiana franchise.” And again: the jurisdiction of Kentucky. The courts of “We recognize the difficulty which someKentucky held that, under the statute, “the times exists in particular cases in determinboard of valuation and assessment did not ing the situs of personal property for purattempt to assess or tax its revenues com- poses of taxation, and the above cases have ing from the exercise of its franchise in the been referred to because they have gone into transportation of persons and property over judgment, and recognize the general rulo the Ohio river. But under certain sections that the power of the state to tax is limited of the Kentucky statutes it assessed the val- to subjects within its jurisdiction, or over ue of appellant's franchise, which is its in which it can exercise dominion. No difficul. tangible property. The board did not as- ty can exist in applying the general rule in sess, or attempt to assess, the property, this case; for, beyond all question, the ferry either tangible or intangible, which it owned franchise derived from Indiana is an incorin the state of Indiana.” This court stat-poreal hereditament, derived from and haved: “It thus appears from the admitted -ing its legal situs in that state. It is not facts and from the opinion of the court be within the jurisdiction of Kentucky. The low that the state board, in its valuation taxation of that franchise or incorporeal and assessment of the franchise derived by hereditament by Kentucky is, in our opinthat company from Kentucky, included the ion, a deprivation by that state of the propvalue of the franchise obtained from Indi-erty of the ferry company, without due proana for a ferry from its shore to the Ken- cess of law, in violation of the 14th Amendtucky shore. In short, as stated by the ment of the Constitution of the United court of appeals, the value of the franchise States; as much so as if the state taxed the of the ferry company was fixed 'as if it con
real estate owned by that company in Inducted all its business in the territorial lim-diana.” And in conclusion it was said: “We its of the state of Kentucky,' making no de decide nothing more than it is not compeduction for the value of the franchise ob- tent for Kentucky, under the charter granttained from Indiana.” It was held that the
It was held that the ed by it, and under the Constitution of the franchise granted by Indiana to maintain United States, to tax the franchise which a ferry from the Indiana shore was wholly its corporation, the ferry company, lawfully distinct from the franchise obtained from acquired from Indiana, and which franKentucky to maintain the ferry from the chise or incorporeal hereditament has its Kentucky shore, although the enjoyment of situs, for purposes of taxation, in Indiana.' both was essential to a complete ferry right It is plain that in the case at bar the for transportation of persons and property coal had lost its situs in Pennsylvania by across the river both ways. And each fran
And each fran- being transported from that state to forchise was property entitled to the protection eign states for the purposes of sale, with of the law. After holding that the privi- no intention that it should ever return to lege of maintaining a ferry in Kentucky its state of origin. It was, therefore, as from the Indiana shore to the Kentucky much outside the jurisdiction of the state shore was a franchise derived from Indiana, of Pennsylvania to tax it as was the Inand as that franchise was a valuable right diana franchise in the case just cited, and of property, the question arose whether it it has been taxed just as directly and spewas within the power of Kentucky to tax it, cifically under the facts stated in this case directly or indirectly, and this court said: as was the Indiana franchise taxed in Ken"It is said that the Indiana franchise has tucky by the valuation of the Kentucky not been taxed, but only the franchise de franchise, which value was increased by the rived from Kentucky; that the tax is none value of the franchise created by Indiana. the less a tax on the Kentucky franchise, be- Taxation of the coal in this case deprived cause of the value of that franchise being the owner of its property without due proincreased by the acquisition by the Ken- cess of law, as is held in the above case, and tucky corporation of the franchise granted the owner is entitled to the protection of by Indiana. This view sacrifices substance the 14th Amendment, which prevents the to form. If the board of valuation and as- taking of its property in that way. sessment, for purposes of taxation, had sepa- The judgment of the Supreme Court of rately valued and assessed at a given sum Pennsylvania is reversed, and the cause re
manded for further proceedings not incon- | evidence heard on the complaint of the sistent with the opinion of this court. plaintiff, showing the material facts Reversed.
stated in the complaint. The trial court
found the facts as follows: The CHIEF JUSTICE dissented.
"That the plaintiff during all the times mentioned in said complaint, to wit, from
the first day of January, 1902, down to the (198 U. S. 361) LEE L. CLARK, Robert N. Bennett, T. F. present time inclusive, was, has been, and Carlisle, Lincoln Carlisle, and Richard now is the owner of, in possession of, and
entitled to the possession of, the south half Carlisle, Piffs. in Err.,
of the northwest quarter of section 24, in
township 4 south of range 1, east of Salt E. J. NASH.
Lake meridian, in Utah county, state of
Utah. Eninent domain-condemnation for public “That Fort Canyon creek is a natural use.
stream of water flowing from the mountains
on the north of plaintiff's said land, in a The peculiar local conditions in Utah justify,
as authorizing condemnation for a public use, southerly direction to and near to plaintiff's a statute of that state under which an indi" said land. vidual landowner may condemn a right of “That said land of plaintiff above deway across his neighbor's land for the en- scribed is arid land and will not produce largement of an irrigation ditch therein, in without artificial irrigation, but that, with order to enable him to obtain water from a artificial irrigation, the same will produce stream in which he has an interest, to irrigate his land, which otherwise would remain abundantly of grain, vegetables, fruits, and absolutely valueless.
""That the defendants own land lying [No. 218.]
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 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 defend
See 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: "The plaintiff is the owner of, and en
This action was brought by the defend-titled to the use of, sufficient of the reant in error, Nash, to condemn a right of mainder of the flow of the waters of the way so called, by enlarging a ditch for the said Fort Canyon creek to irrigate his said conveying of water across the land of plain- land and that the irrigation of said land by tiffs in error, for the purpose of bringing the waters of said creek, and the uses of the water from Fort Canyon creek, in the county said waters in the irrigation of the said and state of Utah, which is a stream of lands of the defendant, is, under the laws water flowing from the mountains near to of this state, declared to be, and the same the land of the defendant in error, and thus is, a public use. to irrigate his land.
“That the said waters of said Fort CanThe plaintiffs in error demurred to the yon creek cannot be brought upon the said complaint upon the ground that the same plaintiff's said land by any other route exdid not state facts sufficient to constitute a cept by and through the ditch of the defendcause of action against them. The demurrerants, owing to the canyon through which was overruled, and the defendants then said ditch runs being such as to only be waived all time in which to answer the com- possible to build one ditch. plaint, and elected to stand on the demurrer. "That plaintiff has no other way of irriThereafter there was a default entered gating his said land except by the use of against the defendants, and each of them, the waters of said Fort Canyon creek, and for failing to answer, and the case was, un- that unless plaintiff is allowed to enlarge der the practice in Utah, then tried and 'the ditch of the defendants, and have a right 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 in any manner interfere with the free and to the plaintiff's said land, that said land full use thereof by the defendants for the of plaintiff will be valueless and the waters carrying of all waters of the said defendof said Fort Canyon creek will not be avail- ants.” able 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
"Conclusions of Law. inches deep; that if the plaintiff is per
“The court finds and decides that the mitted to widen said ditch one foot more it will be sufficient in dimensions to carry plaintiff is entitled to a decree of this court plaintiff's said water, to which he is en condemning a right of way through defendtitled, to his said land, and the same can ants’ said ditch, to the extent of widening and will be put to a beneficial and public said ditch one foot more than its present use, in the irrigation of the soil on plain- width, and to a depth of said ditch as now tiff's said land hereinbefore described.
constructed through the entire length there“That on the 16th day of January, 1902,
of down to plaintiff's said land, for the purand while the said defendants were not in pose of carrying his said waters of said the actual use of their said ditch, and while Fort Canyon creek to the land of the plainthe widening of said ditch at said time tiff for the purpose of irrigation, and is enwould not in any manner interfere with said titled to an easement therein to the extent defendants, other than the act of widening of the enlarging of said ditch, and for the of same, the plaintiff requested of the said purposes aforesaid, and to have a perpetual defendants the right to so widen the said right of way to flow waters therein to the
extent of the said enlargement. ditch of the said defendants so to make it one foot wider, for the purpose of using the and recover from the said plaintiff the sum
“That the defendants are entitled to have same to carry the water of the plaintiff on of $40.00 damages for injury sustained by to his said land from said creek, and at said time and place offered to pay to said de.
reason of the enlargement and improvement fendants all damages which the said defend. above stated and such right of way and
easement. ants might suffer by reason of said enlargement, and offered to pay his proportion of
"That the plaintiff is required to conthe maintenance of keeping the same in re
tribute to the cost and expense of maintainpair, 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
an amount and proportion bearing the same with said defendants, and to use the same
relation to the whole amount of cost and exso as not to interfere with the use of said pense as the waters he flows therein bears ditch by said defendants, and it further ap: the plaintiff and defendants.
to the whole amount flowed therein both by pearing to the court that the said plaintiff is now and has ever since been willing to and judgment is hereby ordered to be en
“That the plaintiff recover no costs herein pay said damage and all damage incident
tered accordingly.” thereto, and to pay his just proportion of the cost of maintaining said ditch. That findings, the defendants appealed to the su
Judgment having been entered upon these the said defendants then and there and ever since have refused to permit plaintiff to en- ment, the judgment was affirmed. 27 Utah,
preme court of the state, where, after argularge said ditch or to use the same, or in 158, 101 Am. St. Rep. 953, 75 Pac. 371. any manner to interfere with the same. "And it further appearing to the court
Mr. J. W. N. Whitecotton for plaintiffs that the said defendants would suffer dam
in error. ages by reason of the enlarging of said ditch
No counsel for defendant in error. one foot in width, in the sum of $40.00, and no more. And that the said plaintiff has
Mr. Justice Peckham, after making the deposited with the clerk of this court, to be foregoing statement, delivered the opinion paid to the order of the said defendants, the of the court: sum of $40.00, in full payment of such
The plaintiffs in error contend that the damages. That the land of the defendants proposed use of the enlarged ditch across not sought to be condemned by plaintiff their land for the purpose of conveying would suffer no injury or damage.
water to the land of the defendant in error “And it further appearing from said evi- alone is not a public use, and that, theredence that said ditch of the defendants can fore, the defendant in error has no constitube widened by the plaintiff one foot more tional or other right to condemn the land, without injury to defendants or to said or any portion of it, belonging to the plainditch, and that said widening of said ditch'tiffs in error, for that purpose. They argue