Farmers & Merchants Bank v. City of Richland Center ( 1914 )

MáRshall, J.

The question of whether the capital stock of respondent was taxable for 1913 must be solved by the written law. Decisions elsewhere in respect' to the matter are more liable to mislead than illumine, as is quite well evidenced by the history of this case.

By secs. 1033 and 1034, Stats., all property existing in this state on the 1st day of May in any year, subject to some exceptions which do not include bank stock, is subject to taxation for such year.

By sec. 2024- — 9, Stats., upon articles of incorporation of a bank being filed, as in this case, a banking corporation is created, Raving all the powers of any such corporation under the laws of this state excepting that of prosecution of the business of banking, which waited upon obtaining a certificate of competency from the commissioner of banking under sec. 2024 — 10, Stats., within one year after creation, failure of which to be penalized by the corporation ceasing to exist.

As a condition of obtaining such certificate of competency, it is provided in sec. 2024 — 12, Stats., that-the authorized capital must be fully paid in and all conditions precedent to the corporation commencing business be complied with, as was the case in the particular instance, before the 1st day of May, 1913, except as to a few shares as to which certificates were held to await full payment for the stock.

■ So in view of the facts and the law, the respondent bank was an existing corporation on the 1st day of May, 1913, with full-paid capital stock, except as to the few shares, and with certificates of stock duly issued. The value of the outstanding stock was not affected by the fact that the certificate of competency had not been obtained. It was in existence with a value presumably equal to its cost of $110 per share. It seems that such situation answers to all the essentials of the statute as to taxation of such property. By what authority the court can say that the stock was not subject to taxation, upon the theory that the thing having a physical existence and of full value did not exist at all, becaiise of present incompetency of the bank to do business, is not perceived. Had the certificate of competency not been obtained within the year limited by the statute, and the penalty of extinguishment had become operative, the value of the shares would have substantially remained. Each certificate holder would have been entitled to his pro rata share of the corporate property and the corporation have remained in practical existence for the purposes of liquidation.

By the Court. — The judgment is reversed, and cause remanded with directions to dismiss the same with costs to the defendant.