was taxed in that municipality, and at the same time to subject to like taxation on some fair basis that which was not in its nature so clearly local, but which, by reason of its being appurtenant or incident to the railroad, should pay its share to the state, and to all the counties, towns and cities through which any part of the road ran. The theory of the system was to treat the railroad track, its rolling stock, its franchise, and its capital, as a unit for taxation, and to distribute the assessed value of this unit according as the length of the road in each county, city and town compared to the whole length of the road. The Supreme Court of the United States held that this method of assessment was neither in conflict with the constitution of Illinois, nor inequitable. 12 Having considered the justice and equity of forcing corporations and corporate interests to contribute to the support of the government, let us now see whether the state legislatures have been as fair to the subjects of taxation as they have been just to their respective states. Some states are not getting enough from corporations, some are getting too much. We hear a great deal about proposed reforms in the laws relating to marriage and divorce. Many of the states have experienced a reform in their laws pertaining to negotiable instruments. It is not always the case, however, that the necessity for a reform grows out of the evils existing in laws concerning domestic relations, or transactions of a commercial nature between private parties. Reforms may sometimes be necessary in matters that directly touch the state, where the evil sought to be remedied is one that exists between the state and the subject rather than between the subjects themselves. This may arise. from evils and injustices of the criminal laws, but in cases where criminal statutes unjustly work a hardship and are contrary to the spirit and the necessities of the times, popular disfavor may act as a restraint on the enforcement of such laws. However, this situation does not arise in reference to inequitable laws working an unjust imposition of taxes. If there is any reform sorely needed in any branch of the law, surely the laws of some of the states should undergo a radical change in reference to taxation, especially the taxation of corporations and corporate interests. The labors of the American Bar Association could be spent in no better way than to work in the interest of devising better systems of raising money for the sup 12. State Railroad Tax Cases, 92 U. S. 575. port of the state governments. Quite a number of the states have enacted laws which tend to avoid unjust and double taxa. tion, but there still exists plenty of room for further progress in this line, especially where the same property owned by the same person is subjected to taxation in more than one jurisdiction. In such cases, a uniform system of taxation is needed, as much as was needed a uniform negotiable-instruments law. Even though a corporation possesses no soul and is devoid of suffering mental anguish, yet it should not be forgotten that a business enterprise of this kind is composed of citizens who are entitled to equality and justice before the law the same as other citizens. The fact that a citizen's capital is invested in a corporation or its property does not warrant an unjust imposition of taxes upon such capital, different from that imposed upon other property. In many cases an unfriendly feeling has caused corporations to suffer hardship in contributing to the public burdens. Let us take under consideration some of the situations wherein corporations and certain corporate interests are subjected to unfair, but not necessarily illegal taxation. The burden of taxation may be unfair in the following cases: First. Where the stockholders of a corporation are taxed on their shares of stock in the state where they dwell and are also taxed on the same shares by another state wherein the corporation is located. Such a tax was sustained by the Supreme Court of Rhode Island in a case where a shareholder contested his liability to taxation in Rhode Island, the state of his residence, on stock which he held in certain corporations formed and operating under the laws of Massachusetts, in which state the stockholder had already paid taxes on the same stock. The court said, "The plea avers that the defendant has already paid a tax assessed upon the shares in Massachusetts. It is doubtless a hardship for him to pay taxes on the property in two states. But the Massachusetts tax, even if valid, could not divest this state of its jurisdiction. The laws of Rhode Island are paramount in Rhode Island, and all the inhabitants of the state are subject to them without regard to the laws of any other state. * * * It would certainly be going too far to hold that a man of wealth, living in Rhode Island, cannot be taxed at all in Rhode Island, if his property is all invested in the stocks of a manufacturing corporation of another state, and there subject to taxation."13 13. Dyer v. Osborne, 11 R. I. 321, 23 Am. Rep. 460. See also Worth v. Ash County, 90 N. Car. 409, wherein the Rhode Island case is approved. In many jurisdictions statutory provisions have been enacted relieving from taxation shares of stock in foreign corporations held by residents, when the shares are taxed in the state where the corporation is located. Second. Where the corporation is taxed on its capital stock or property and the shareholders are also taxed on their shares in the same state, there may be an injustice worked. The taxation of the capital stock or property and also the shares of stock, is generally upheld throughout the states of the Union, on the ground that the shares of stock and the capital stock or property are distinct properties belonging to different owners. But this technical legal reasoning does not change the result, which amounts to an unfair burden being imposed on the shareholders who are already taxed on their shares of stock. It is undeniable that in such cases the shareholders bear the burden of the tax imposed on the corporation, inasmuch as the shareholders constitute the corporation and indirectly own its property. 14 In a case recently decided by the Supreme Court of Michigan concerning the taxation of shares of stock when the corporation is taxed on its capital stock or property, the court said, "We are aware that many courts have held that such laws do not require double taxation, upon the very technical reasoning that the tax is not levied upon the same property, and that it is not imposed upon the same person; both of which propositions are true in a sense, but are also untrue in another substantial sense, as stockholders are likely to learn if the action of the authorities in the case is sustained. So, several of the text-books assert that the weight of authority sustains the rule that the states may impose taxes upon both corporation and stockholder, though, without exception, they admit the severity and injustice of such measures, and say that the courts will never permit it where the law is susceptible of another construction. This practice is so palpably unjust that Michigan does not tax shareholders in domestic corporations, where the property of the corporation is taxed."15 Third. Another situation, that is similar in result to the second, is where the shareholders of a corporation are taxed in the state where they dwell and the corporation is also taxed on its property or capital stock in another state where it is located. 14. See Stroh v. Detroit, 131 Mich. 109. 15. Stroh v. Detroit, 131 Mich. 109. This form of taxation has been deemed unjust, and many of the states pursue the more equitable policy of relieving from taxation domestic shares of stock in foreign corporations, where the corporations are taxed on their capital stock or property in another jurisdiction. All of the above situations again and again have been presented to the courts for relief, but however unjust, the taxation has been upheld in the absence of legislative relief, on the grounds that the properties and owners are distinct, and that the protection afforded by the law should be supported by the property protected. Nevetheless, in many cases, the courts have reluctantly sanctioned such taxation and have stated that they were powerless to grant relief as the remedy was within the legislative domain, to which the aggrieved parties were directed. Xenophon P. Huddy. Published monthly during the Academic year, by students of the Yale Law School. If a subscriber wishes his copy of the JOURNAL discontinued at the expiration of his subscription, notice to that effect should be sent; otherwise it is assumed that a continuation of the subscription is desired. THE SCOPE OF AUTHENTICATION BY SIGNATURE. Where the law requires, as evidence of a transaction or contract, a writing signed, or signed and witnessed, the quesion often arises, just what constitutes writing which is authenticated by the signature. The answer must be determined by (1) the physical unity of the writing, (2) its rhetorical unity, (3) oral testimony. By rhetorical unity is intended that internal sense, coherency and consistency which characterize a complete legal instrument.1 Of the three tests or proofs, that of rhetorical unity is essential and controlling. Mere physical juxtaposition of writings is unavailing to effectuate them as a single writing in the absence of rhetorical unity. In re Drummond, 2 Sw. and Tr. 8; In re Tovey, 47 L. J. P. 63. Oral testimony may be received in aid of rhetorical unity (Allen v. Maddock, Moore, P. C. C. 427), but not to unite documents whose rhetorical structure is clearly distinct. To allow the latter would clearly violate the so-called parol evidence rule. But is rhetorical unity sufficient in the absence of physical juxtaposition? With the exceptions hereafter noted, this question has uniformly been answered in the affirmative. It has arisen in cases divided by the books into four classes: 1. Those which hold that a memorandum in writing under the statute of frauds may be made up of two or more documents provided they refer to each other. 29 A. and E. Ency. Law (2d ed.) 850. 1. Cf. Barnewell v. Murrell, 18 So. 831 (Ala.). |