Citation Numbers: 103 Me. 418, 69 A. 306, 1907 Me. LEXIS 50
Judges: Cornish, Emery, King, Savage, Strout, Whitehouse
Filed Date: 12/19/1907
Status: Precedential
Modified Date: 10/19/2024
The Livermore Falls Trust and Banking Company the defendant bank, was located and doing business in East Livermore on April 1, 1905, and all the shares of its capital stock were then taxable, and presumably were taxed, at their "just value” l in some form in some town in this State, at least so far as such taxing would not be double taxation. R. S., ch. 9, sects. 5 and 29. At that date, however, the bank had purchased and then owned as part of its assets certain shares in national banks and in other trust or banking companies located in this State. The tax assessors ¡ of East Livermore that year assessed a municipal tax against the | defendant bank upon those shares. This suit is to recover that tax.
In the arguments and briefs and in many of the cases cited there was considerable discussion of the nature of such a tax, whether it was a tax upon the franchise of the bank, upon its deposits or depositors, upon its capital stock, or otherwise. We see no need to follow that discussion. The tax sought to be recovered here is simply a tax on certain specific articles of personal property owned by a moneyed corporation, to wit a banking corporation. It is undoubtedly within the letter of the statute cited. R. S., ch. 9, sec. 5. The bank is the beneficial as well as the legal owner of the property. It does not hold the shares as security. It is not known and it does not matter whether they were purchased out of the money paid in as capital stock, or out of the money deposited, or out of surplus and undivided profits. They were purchased with the funds of the bank and are part of its assets available for the payments of its debts and for distribution among its stockholders upon liquidation.
There is also much discussion in the cases as to whether a tax j upon corporate shares to the stockholder and another tax upon the | corporate property, to the corporation, is double taxation. There ( are many cases favoring the plaintiff’s argument that in legal theory a corporation is a distinct and different, person from the owners of its capital stock, that its liabilities are not their liabilities, that its assets are not their assets, and hence that a tax on its property is not a tax on their property and so is not double taxation within the
It is suggested, however, that moneyed corporations such as banks are so different in nature from business corporations generally that they are not within the purview of those cases or of the above statement. We do not see any practical difference between them so far as taxes upon their property are concerned. A banking corporation (not speaking now of pure savings banks) is a business corporation pure and simple. It is not for charitable, literary, or social purposes or for any other purpose than for business and business profits for its stockholders. It owes money and has money due it. It borrows money and uses the. borrowed money in its business of discounting notes, dealing in stocks, bonds, etc. Its depositors are merely its creditors. They have merely loaned it money. They have no more concern with its assets or its investments than any
We thiiik it clear that the imposition of the tax sued for in this case adds to the tax burden of the stockholders, and practically in a business sense, even if not in the strict legal sense, results in cumulative or double taxation upon the same person for the same property.
Has the legislature, nevertheless, clearly, explicitly, authorized the tax sued for with its manifest inequitable results as above stated ? It is elementary that no tax can be imposed without express statutory authority, that such authority is to be construed strictly against the State, and particularly that no double tax burden shall be imposed on any person or property unless the statutes so clearly require it that no other construction is possible in reason. "The intent to impose taxation which is double even from an economic point of view is not to be ascribed to the legislature in the absence of clear, unambiguous expression.” Bank v. Douglass Co., (Wis.) 102 N. W. 315. "Tax laws should be so construed as to avoid double taxation unless a contrary construction is compelled' by express provision or necessary implication of the statute.” . County Commrs. v. Bank, 23 Minn. 280. "Double taxation.is never to be presumed. Justice requires that the burdens of goverment shall as
The plaintiff’s counsel contends thát the tax, even if an additional burden on the same persons, is clearly authorized by the explicit, unqualified language of the statute. They cite R. S., ch. 9, sec. 2, which enacts that "all personal property of the inhabitants of the state” is subject to taxation; also sec. 5, which enacts that "personal estate for the purposes of taxation includes all shares in moneyed and other corporations within or without the state;” also sec. 12, which enacts that "all personal property within or without the state” (with certain exceptions not applicable to bank stocks) "shall be assessed to the owner in the town,where he is an inhabitant on the first day of each April;” also secs, 30, 31, 32, 33 and 34, which, however, do not expressly impose a tax on bank shares, but rather provide how and when the tax on them shall be assessed and collected. They also cite from sec. 29 the clause "but the stock of such banks, banking associations and other corporations shall be taxed to the owners thereof where they reside.”
It may be conceded that the language of sec. 5 is explicit that all shares in moneyed corporations shall be taxed, but it does not necessarily follow that they are to be taxed twice, or so taxed that the result would be a double taxation of them. The section is equally explicit that "all goods, chattels, moneys and effects . . . all obligations for money or other property . all public stocks and securities” shall be taxed. If it follows from this that all such property is to be taxed to a corporation whose shares representing the same property are taxed to the shareholders, there would be a double taxation of crushing weight and all corporations subject to such taxation would be crushed out of existence. If, besides the tax upon their shares, banks and banking companies are to be taxed upon all their stocks, bonds, promissory notes, gold and silver coin, bank bills, legal tender notes, etc., in their vaults or
Section 5, however, should not be read by itself. It is only a part of the statutes upon taxation. It should be read in connection with the other statutes prior and contemporaneous, and also in the light of contemporaneous and subsequent practical construction by the taxing officers and business public. Taking all these into consideration, the tax statutes as a whole do not force us to the conclusion thab a tax is to be assessed at the same time upon all the personal property of a corporation to the corporation and also upon all its shares to the shareholders. The tax laws of this State from its organization have in general, comprehensive terms imposed taxes on all personal property not specifically exempted, terms comprehensive enough to include the personal property of corporations and also the shares of their capital stock; yet it was early held, following the anterior decisions of the court of the parent State, Massachusetts, that such statutes did not impose a tax upon the personal property of a corporation and upon the shares of its stock in the same year’s assessment. The case of Gardiner C. & W. Factory Co. v. Gardiner, 5 Maine, 133, was a case where the Gardiner municipality sought to tax the plaintiff corporation for its personal property. The court held that the tax imposed on the shares of the corporation was a tax upon its personal property as well, and was the only tax that could be levied on such property. The tax act of 1845, ch. 159, in its enumeration of personal property liable to taxation was as specific and comprehensive as the present statute. It included "all goods and chattels, moneys and effects, etc., all shares in moneyed corporations,” etc.; and there was no specific exemption of bank shares owned by another bank; yet in Augusta Bank v. Augusta, 36 Maine, 255, the court said of the act: "The intention is clearly exhibited to subject all real and personal property of the inhabitants of this State to taxation unless
The tax act of 1857 was substantially the same as that of 1845, and came • before the court for interpretation in the case Augusta Savings Bank v. Augusta, 56 Maine, 176. The plaintiff bank had invested some of its deposits in shares of national banks, and the assessors of Augusta had assessed to it a tax upon those shares. At that time the several depositors were liable to municipal taxation on their deposits in the plaintiff bank. The court held that the bank could not be taxed for the bank shares it had purchased, for Lhe reason that it would be double taxation contrary to the policy of the law. We think that case and this-are alike in principle. In that case the bank shares purchased, practically though not theoretically, belonged to the depositors, who by paying a tax on their deposits paid a tax on those shares. In this case the bank shares purchased, practically belong to the stockholders of thé defendant
The present tax act, R. S., ch. 9, does not enumerate or specify any more particularly or explicitly what is to be taxed than did the acts of 1845 and 1857. The other sections cited, secs. 31, 32, 33 and 34, do not impose a tax on corporate shares, but provide how they shall be disclosed to the assessors, and how the tax provided by the previous sections may be assessed and collected.
" We also think a consideration of other sections of the tax act and their history will show that it has been the steady policy of the legislature not to impose double taxation except in the few instances - particularly specified. In assessing the shares of the stock' of a bank to its several stockholders, "the assessed value of the real estate, vaults and safe deposit plants” is to be deducted, R. S., ch. 47, sec. 24. When a company is reqüired by law to invest any part of its capital stock in the shares of another corporation, such investment is not to be taxed to the company but only to its stockholders. R. S., ch. 9, sec. 18. The stock of an insurance company is exempt from taxation to the amount of the- real estate taxed to it, sec. 19. The State tax on railroad companies is in the place of all taxes on its stock. R. S., ch. 8, sec. 24. So is the State tax on telegraph and telephone companies, and, further, the local tax on their real estate is to be deducted from their State tax, sec. 41. So in the case of express companies, sec. 44. The value of the real estate of insurance companies is to be deducted in assessing the State tax upon them, sec. 46. When the legislature,- after the decision in Augusta /Savings Bank v. Augusta, 56 Maine, 176, (supra,) imposed a tax on savings banks measured.by the amount of the deposits in them, it exempted the depositors themselves from taxation on their deposits, sec. 55. In imposing a State tax upon trust companies, etc., measured by the amount of certain of their deposits the legislature exempted those deposits from municipal taxation, sec. 67. ' %
The foregoing illustrations should be enough to show the legislative polity to be against double taxation. There seems to be not only no intention to impose it, but an anxiety to avoid it.
True, there is the argument, expressio unius exclusio alterius, the argument that by not aifirmatively guarding against the double ’ taxation of bank stocks owned by another bank while so carefully guarding against double taxation in the instances named, the legislature meant to leave such stocks exposed to double taxation. The answer is that it does not appear that the legislature ever con-1 templated such double taxation or apprehended that its statutes, would be construed as authorizing it. The court had already held, and more than once, that a tax upon its personal property to a corporation and another tax at the same time upon its shares and its shareholders was double taxation not authorized by the law. Since these decisions the legislature has not in any statute declared explicitly and specifically that in other cases than those named a tax shall be assessed to a corporation upon its personal property in addition to the tax upon its shares. On the contrary, since those decisions the legislature has at least twice re-enacted the statutes upon this subject in substantially the same language. This is to be regarded as an expression of the legislative intent for the court’s interpretation of the statutes to stand as the law. Tuxbury’s Appeal, 67 Maine, 267.
Our conclusion is that our taxing statutes, taken as a whole and interpreted according to well known principles of interpretation, do not require the imposition of the tax sought to be recovered in this suit, and that hence the judgment must be for the defendant.
Judgment for defendant.