old corporations, one of whose property was previously exempt, is not a violation of the constitution as to impairing the obligation of contracts.1

Real property belonging to a county, used for private purposes, and from which the county receives rent, is not exempt from taxation. But exemption of the property of churches, hospitals, and other charitable institutions is given a reasonable construction, being designed for the public benefit.3

§ 1121. Effect of consolidation upon exemption-Subsequent laws. A constitutional or general statutory prohibition against exempting property from taxation, passed before the consolidation of two old corporations, applies to the property acquired by or passing to the new corporation formed by the consolidation; and all the property of the latter may be thereafter taxed as other property, although by the terms of its charter the prop

1 State v. Keokuk & Western R. Co., 6 L. R. Ab. (Mo.) 222; Atlantic & G. R. Co. v. Georgia, 98 U. S. 359; Petersburg v. Petersburgh R. Co., 29 Gratt, 773; Atlanta & R. A. L. R. Co. v. State, 63 Ga. 483.

2 Inhabitants of County of Essex v. B'd of Assessors, City of Salem (Mass), 26 N. E. 431.

8 Laws N. Y. 1889, c. 462, provides that the portion of the property of a certain incorporated hospital society, "from which no income is derived, shall be exempt from taxation, so long as the same shall be used exclusively for the purposes for which said society was chartered." The society had a farm, used exclusively for its charter purposes, and which was not self-supporting. The farm products were almost entirely used in the hospital, but occasionally insignificant articles were sold, and the proceeds were applied to the support of inmates of hospital buildings on the farm. Held, that such proceeds were not "income," within the meaning of the statute, and that exemption was not waived by the society charging patients able to pay, the money received from them being wholly applied to the support of and attendance on patients who could not pay. People v. Pardy, 12 N. Y. S. 307. Under Const. Minn., art. 9, sec. 3, exempting from taxation, "churches, church property used for religious purposes, and houses of worship," a rectory or parsonage used primarily as the residence of the priest or minister is not exempt, though the children from the parish school are taken into the rectory for morning prayers, and the sewing society and Sunday school teachers meet there, and the rector there hears recitations by classes from the school. Ramsey County v. Church of the Good Shepherd (Minn.), 47 N. W. 783.

erty of one of the corporations had previously enjoyed an exemption. The same rule applies where the consolidation takes place under general incorporation laws. or special charters.

These principles are not affected by the fact that several of the consolidating companies were domestic and others foreign. But in the absence of any such prohibition that portion of the property which was exempt from taxation will continue to be exempt, and that portion which was subject to taxation will continue so. Such is the doctrine of most of the cases. The new corporation takes its powers and privileges, not from the old companies, which are thereby dissolved, but from the act authorizing the consolidation subject to laws and constitutional provisions then in force.2

§ 1122. Construction of exemptiou as affecting shares. -An exemption may extend to part or all of the property of a corporation as well as capital stock, or it may not affect any of such property and extend to the shares outstanding.

The questions whether an exemption of the corporate property, franchises or capital stock from taxation exempts also the shares of stock from taxation, and whether an exemption of the shares exempts the corporate property, franchises and capital stock, have sometimes given rise to litigation, and required courts to construe the statutory provisions under which such

1 State v. Keokuk & West. R. Co. (Mo.), 6 L. R. An. 222. See also, State v. Carruth, 67 Mo. 445; Central R. & Bkg. Co. v. Ga. 92 U. S. 665; Marine Cent. Co. v. Maine, 96 U. S. 499; Clearwater v. Meredith, 1 Wall. 25; Atlantic & G. R. Co. v. Ga., 98 U. S. 359; McMahan v. Morrison, 16 Ind. 172; Lauman v. Lebanon Val. R. Co., 30 Pa. St. 42; Memphis & L. R. R. Co. v. R. R. Commrs., 112 U. S. 619, 622.

2 State v. Keokuk & West. R. Co., supra. Clearwater v. Meredith, 1 Wall. 38; Shields v. Ohio, 95 U. S. 323; Lauman v. Lebanon Val. R. Co., 30 Pa. 42.

exemptions were claimed. But there is considerable conflict of decision on the first question, caused, no doubt, by differences in the phraseology of statutes.1

With respect to the second question, the authorities are more harmonious. According to the decided weight of authority, an exemption of shares exempts also the corporate franchises, capital stock and property generally. The basis of the decisions is the acknowledged

1 In Kentucky and New Jersey, Indiana and in the federal courts an exemption of either one or all of property franchises or capital stock exempts by implication the shares of stock. Johnson v. Com., 7 Dana (Ky.), 338; State v. Branin, 23 N. J. L. 484; Same v. Bentley, Id. 532; King v. City of Madison, 17 Ind. 48; Gordon v. App. Tax Court, 3 How. 133. See also, State of Tenn. v. Whitworth, 22 Fed. Rep. 75; Id. 81; aff'd 117 U. S. 139; Hannibal & St. Joseph R. R. Co. v. Shacklett, 30 Mo. 550; New Orleans v. Houston, 119 U. S. 265; Cooley on Taxation (2d Ed.), 212; U. S. v. R. R. Co., 17 Wall. 322. Act La.. 1888, No. 85, § 27, provides that corporate stocks shall be assessed to the stockholders, deducting from the value of each share its pro rata of all property assessed directly to the corporation, and all of its exempt property. Section 1 levies a tax on the value of all property in the state except such as is expressly exempted by the constitution. Const. La. art. 207, provides that certain designated property shall be exempt, and no other. Held, that the words 66 exempt property" were confined to the property enumerated in the constitu tion, and that the value of state and city bonds exempt from taxation in the hands of the corporation was not to be deducted from the value of the shares assessed to the stockholders. Parker v. Sun Ins. Co. (La.), 8 So. 618.

Rev. St. Ind. 1881, §§ 6305, 6308, which provide that the property of a corporation shall not be assessed at a greater rate than that of an individual, and that, "where the tangible property or the capital stock of an incorporated company is listed and assessed, the shares of capital stock of such incorporated company shall not be listed and assessed," clearly prohibits the assessment of the capital stock where the entire capital is invested in tangible property which is duly listed and returned for taxation. Hyland v. Brazil Block Coal Co. (Ind.), 26 N. E. 672. The question has been passed upon in but few of the other states. In Maryland, North Carolina and Tennessee such exemption has been held not to extend to the shares of stock. See Tax Cases, 12 G. & J. (Md.), 117; App. Tax Court v. Rice, 50 Md. 392; County Commrs. v. Annapolis, etc., R. R. Co., 47 Md. 592; Gordon Ex'rs. v. Mayor, etc., 5 Gill. (Md.), 231; Belo v. Commrs. of Forsyth, 82 N. C. 415; Union B`k v. State, 9 Yerg. (Tenn.), 490; City of Memphis v. Farrington, S Baxter (Tenn.), 539. Compare State v. Balt. & O. R. R. Co., 48 Md. 49. In County Commrs. v. Annapolis, etc., R. R. Co., supra., the court say: "To make out the claim to this exemption from the taxing power of the state, so essential to the support of its government, it is incumbent upon corporations to show that the power to tax has been clearly relinquished by the state."

principle that a tax on the property represented by the stock is substantially a tax on the stock itself, and an additional tax upon the latter would be double taxation.1

1 Scotland Co. v. Mo. Ia., etc., Ry. Co., 65 Mo. 123; County Commrs. v. Annapolis, etc., R. R. Co., 47 Md. 592; B'k of Cape Fear v. Edwards, 5 Ired. Law (N. C.), 516; Tax Cases, 12 G. & J. (Md.), 117; Mayor, etc., of Balt. v. Balt. & O. R. R. Co., 6 Gill. (Md.), 288; Gordon's Exrs. v. Mayor, etc., of Balt., 5 Gill. (Md.), 231. Compare Wilmington & W. R. R. Co. v. Reid, 64 N. C. 226; Raleigh, etc., R. R. Co. v. Reid, Id. 155; State v. Petway, 2 Jones' Eq. (N. C.) 396. Shares are not exempt by reason of an exemption or bonds owned by the corporation. Home Ins. Co. v. Board of Assessors (La.), 8 So. 481.