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provided for by means of a state board. The courts did not feel called upon, and would not undertake, to formulate the principles upon which corporate franchises should be valued, but contented themselves with saying that they were capable of valuation apart from the corporate property, and if erroneous principles were applied so that overvaluation resulted the corporations would in proper cases be entitled to relief. Wilmington, C. & A. R. Co. v. Brunswick County, 72 N. C. 10; Richmond & D. R. Co. N. C. Div. v. Brogden, 74 N. C. 707; Richmond & D. R. Co. v. Alamance, 84 N. C. 507; Atlantic, T. & O. R. Co. v. Mecklenburg, 87 N. C. 129.

Since these cases were decided the statute law of North Carolina in point has undergone a change. The present act, called the machinery act (Pub. Laws 1901, chap. 7, §§ 48-50, amending Laws 1899, chap. 15), requires the assessment of corporate franchises apart from tangible property after, but not until, June 1, 1903. Jackson v. Corporation Commission, 130 N. C. 385, 42 S. E. 123.

In Nevada it was said, in 1875, that no principle of valuation was prescribed by the laws of that state; that the statutes defined different species of property, and provided for their assessment at the actual cash value, but that, as to the mode of ascertaining the cash value, the statute law was silent. That no subsidiary principles of valuation were laid down to guide the owner in making a statement in those cases where a statement specifying values was required, and that the assessor was left wholly unrestricted in making his estimate. State v. Central P. R. Co. 10 Nev. 47. The court there justified the unit and entirety rule.

The question of deductions from the data upon which corporate franchises are valued is not less troublesome than the question of the elements to be included therein. Here, again, the rules vary with the varying jurisdictions, and the best that can be done in elucidation is the citation of special instances.

In Connecticut ascertained and unpaid losses owing by a mutual insurance company subject to a franchise tax equal to a stated percentage on the amount of cash capital belonging to it upon a named date are to be deducted in computing such capital. Coite v. Connecticut Mut. L. Ins. Co. 36 Conn. 513.

But such a company is not entitled to deduct the amount of declared but undistributed dividends applicable toward the reduction of premium notes of policy holders not included in the capital account. Ibid.

In Kentucky debts are not deductible. Henderson Bridge Co. v. Com. 99 Ky. 623, 29 L. R. A. 73, 31 S. W. 486; Paducah Street R. Co. v. McCracken, 20 Ky. L. Rep. 1294, 49 S. W.

178.

As the Massachusetts statute for taxing corporations according to the aggregate market value of their shares of stock only provided for deducting real estate and machinery locally taxed, a corporation taxable thereunder was not entitled to a deduction of any other taxable property it possessed. Com. v. New England Slate & Tile Co. 13 Allen, 391.

And it is no answer to an application by a Massachusetts corporation for a reduction of an assessment upon its real estate and machinery that the assessed valuation as it stands was deducted in assessing its franchise tax from the fair cash value of its shares. The two taxes are not complementary,-intended to divide between them the corporate property. Tremont & S. Mills v. Lowell, 178 Mass. 469, 59 N. E. 1007.

In New York, in assessing a tax upon the

corporate franchise of a domestic corporation which has paid 6 per cent or more dividends under a statute providing that every domestic corporation, and every foreign one, doing business in that state shall be liable to, and pay, a tax as a tax upon its franchise or business, into the state treasury annually, computed, when during the year a dividend of 6 per cent or more has been declared upon the par value of the capital stock, at a stated rate upon the capital stock for each 1 per cent of dividend so declared, and in the case of a corporation paying no dividend or less than 6 per cent dividend, at another rate upon each dollar of the valuation of the capital made according to a method therein prescribed,-the tax is based on the par value of the stock, and hence it is immaterial what the amount of the assets are, nor are the corporate debts deductible. People ex rel. Jewelers' Circular Pub. Co. v. Roberts, 155 N. Y. 1, 49 N. E. 248.

It is otherwise in the case of a nondividend paying corporation where the basis of the tax is the actual, and not the par, value of the capital stock. People ex rel. Wiebusch & H. Co. v. Roberts, 154 N. Y. 101, 47 N. E. 980.

In Pennsylvania, under the act of June 8, 1891 (P. L. 229), in valuing the capital stock, including the franchise of a corporation, the corporate debts are facts relevant to take into account, but not specifically to be deducted. Com. v. New York, P. & O. R. Co. 188 Pa. 169, 41 Atl. 594; Com. v. Manor Gas Coal Co. 188 Pa. 195, 41 Atl. 605; Com. v. Beech Creek R. Co. 188 Pa. 203, 41 Atl. 605; Com. v. Shamokin, S. & L. R. Co. 3 Dauph. Co. Rep. 168; Com. v. Lake Shore & M. S. R. Co. 3 Dauph. Co. Rep. 172; Com. v. Mammoth Vein Coal & I. Co. 3 Dauph. Co. Rep. 220; Com. v. Jamestown & F. R. Co. 3 Dauph. Co. Rep. 214.

X. Administration and relief.

In this division no attempt has been made to collate the almost innumerable decisions relating to defects and irregularities, objections, acts, and omissions of either public officers in assessing and collecting, or taxpayers in re viewing or resisting taxes, or respecting suits, actions, or special proceedings, points of practice or procedure, or rights and remedies which the authorities on the one hand, or taxpayers on the other, must or may pursue or have in enforcing, contesting, or recovering back taxes, except in so far only as the cases in point have had peculiar and appropriate application to the particular kind of taxation that is the subject of this note. There have been several of these, but they do not lend themselves to systemization.

When a state imposes a specific tax upon the franchises of corporations doing business within its borders, and requires every such corporation to take out a license, not only as evidence of the payment of the tax, but also as a condition upon which its privileges may be exercised or its business pursued; and a county is without any legal authority to add thereto a county tax,-the refusal of the proper officer to issue a license to a corporation applying for one and entitled to have it, unless it will pay an additional county tax, does not justify such corporation in carrying on business without such license, nor save it from the pains and penalties of so doing; but its remedy is by mandamus to the officer to compel him to issue the license. Phoenix Carpet Co. v. State, 118 Aia. 143, 22 So. 627.

When a railroad has and operates under two franchises, one from the state subject to state taxation, and the other from the United States ' and exempt therefrom, and makes, as required

by a state statute, a written statement to a state board for the purpose of being assessed upon its franchise, roadway, roadbed, rails and rolling stock, stating in a lump amount the value thereof within the state, while it is not of necessity concluded thereby from showing the contrary, yet in the absence of qualification or opposing proof, it is presumed that the taxable, and not the exempt, franchise was meant, and a general assessment accordingly is valid. People v. Central P. R. Co. 105 Cal. 576, 38 Pac. 905.

Where, under a statutory system of railroad taxation, the value of each railroad, its rights, franchises, and property for the purposes of taxation is assessed by a state board whose determination is made conclusive, and the basis of whose action is a sworn return made by the railroad annually in January covering sundry items showing its condition, including the number and market value of its shares of stock and its cash on hand on the first day of the month, the amount of which is to be deducted in fixing the assessment, but which statement such board has the right and power to correct; if an assessment is made and the tax accordingly paid, the state can recover no additional sum, although it afterwards turns out that the item deducted as cash on hand was much too large because of including many elements not properly so classified, and this although the board had too limited a time and no power to summon witnesses and investigate books to learn the truth. State v. New York, N. H. & H. R. Co. 60 Conn. 326, 22 Atl. 765.

When the Constitution and statutes commit to officers selected for the purpose the duty of assessing the capital stock and franchises of corporations, and provide for no review by the judicial branch of the government, the courts are powerless to reduce an overvaluation when the assessors act without fraud and according to law. Ottawa Glass Co. v. McCaleb, 81 Ill. 557; Coal Run Coal Co. v. Finlen, 124 Ill. 666, 17 N. E. 11.

The omission of a corporation to make the required statutory return to the board of equalization as the basis for that body to assess its capital stock and franchise because it was not supplied with blank forms and instructions, nor was any return demanded of it, does not invalidate a tax laid upon its capital stock and franchise when the assessing board is charged by law to value the capital stock and franchises of corporations, is empowered to do so upon other evidence than corporate returns afford, and acts at public meetings where corporations have full opportunity to appear and be beard. Pacific Hotel Co. v. Lieb, 83 Ill. 602, Followed in Elgin City Bkg. Co. v. Eaton, 3 Ill. App. 432.

It is not a valid objection that the valuation of the capital stock and franchise of a railroad corporation using and operating a line of railroad, of which it owns in fee three-fifths and leases two-fifths from other roads of the mileage of the main track, is distributed to counties where only leased lines are operated, when the taxing statute requires that the aggregate assessment on capital stock and franchises shall be distributed proportionately to the several counties in like manner that the property denominated railroad track is distributed, which is in proportion that the length of the main track in each county bears to the whole length of the road in the state; and when lines leased, as well as those owned, are in express terms taxable to the corporation using and operating them as a part of its general system under charter authority. Huck v. Chicago & A. R. Co. 86 Ill. 352.

A charge that a board of equalization acted

without any basis of fact in valuing the capital stock and franchise of a railroad corporation for the purpose of taxation is unsustained when there was before it a return purporting to emanate from a representative of the corporation in conformity with a statute requiring such a return to be made by the corporation, since the board had a right to rely thereon in the absence of any showing that it was untrue or incorrect. Union Trust Co. v. Weber, 96 Ill. 346.

The validity of such tax is not in the least affected by the omission of such board properly to apportion the proceeds thereof among the counties thereunto entitled, nor by its improper distribution thereof. The road is not injured, -it cannot be called upon to pay twice, nor any more. It is for a county deprived of its just share to complain and seek redress from the state or the offending officers. Ibid.

There is a dictum in that case that the right of way, depot grounds, railroad track, and franchise of a railroad corporation are liable to taxation without reference to their ownership, and that the listing them in the wrong name as owner affords no ground for enjoining the tax, in no wise renders it inequitable and unjust. The proposition is without weight, as in the particular case the court held that the listing was to the real owner by name, and the chief justice, in concurring in the result, was careful to withhold his assent from the views expressed in the opinion. Ibid.

When a law requires corporations to furnish, for the purposes of taxation, to a public officer a statement under oath in a form he prescribes, showing certain facts, and makes it his duty, in case such statement is not furnished, to obtain the needful information by other means, and lay it before the state board of assessment and equalization as a basis for its action, the submission of an unsworn statement is equivalent to rendering none at all, and leaves a corporation in that situation without ground of complaint that the valuation set down by it in the unverified statement was increased without any notice to it. Iowa & D. Teleph. Co. v. Schamber (S. D.) 91 N. W. 78.

A statute making it a misdemeanor punishable by a fine of $1,000, and $50 a day additional, for a corporation or its officers wilfully to fail or to refuse to make a report to the state auditor as the basis of a tax upon the corporate franchise, is infringed, and the penalty therein prescribed is incurred, by the mere omission to make such a report, without any proof of actual knowledge of the law (since everyone is presumed to know the law), or of a demand or request from the auditor, or of any notice to the corporation. It is sufficient that the failure is voluntary. Louisville & J. Ferry

Co. v. Com. 104 Ky. 726, 47 S. W. 877. This ruling simply nullifies the word "wilfully" in a penal statute.

The law involved required the auditor to prescribe the form of such corporate report, but the court held that this did not charge him with any duty to furnish such form to the corporations required to report, nor even to notify any corporation to make a report, in spite of the heavy penalties imposed for wilful failure or refusal to do so. Ibid.

The court thought it involved too much expense, and entailed too much labor upon the auditor, to go or send to corporations throughout the state, and that he was not, in the absence of explicit statutory direction, bound to undertake this labor. The corporations knew the law and where to find the auditor.

It may be remarked, in passing, that the comptroller of the state of New York performs just that labor without difficulty, notwithstanding the disparity in the area of and number of

corporations in the Empire state in comparison with the extent of and companies in Kentucky.

The validity of a tax upon corporate franchises assessed by a state board acting upon reports from the corporations themselves and such other evidence as may come before it is unaffected by the circumstance that no appeal is allowed from its determination. Paducah Street R. Co. v. McCracken, 20 Ky. L. Rep. 1294, 49 S. W. 178.

When the statute provides that should any corporation fail to report annually on or be fore a stated date the state board shall proceed to ascertain the facts and value the franchise for taxation it is intended that such board may exercise its power at any time, especially as a further section provides for the calling of it together from time to time as the business of the board requires. Such board therefore may, when no reports have been made, assess the corporation in default upon its franchise for several past years. Louisville & J. Ferry Co. v. Com. 22 Ky. L. Rep. 446, 57 S. W. 624; Stone v. Louisville, 22 Ky. L. Rep. 423, 57 S. W. 627.

When there is no statutory provision to the contrary, a corporate franchise is taxable where the corporation has its head office, and in the case of a local water corporation whose entire franchise is taxable in a city, although it is partly exercised beyond the city limits, the state board of valuation may be constrained to refrain from apportioning the tax to jurisdictions outside such city. Frankfort v. Stone, 22 Ky. L. Rep. 25, 56 S. W. 679, Rehearing denied in 22 Ky. L. Rep. 502, 58 S. W. 373.

A tax assessed according to law upon the corporate franchise of a bridge company by a state board is not invalidated by the work of computation having been intrusted to a clerk working under the direction and supervision of such board. Louisville Bridge Co. v. Louisville, 23 Ky. L. Rep. 1655, 65 S. W. 814.

Under the Kentucky system of railroad taxation the tangible property is assessable by the state railroad commissioners and the franchise by the state board of valuation and assessment. Southern R. Co. v. Coulter, 24 Ky. L. Rep. 203, 68 S. W. 873.

And when, under such system, the state board of valuation and assessment decides that a railroad corporation is not liable to a local tax upon its franchise for a given year or years because by a mistaken construction of the statute it supposed that the local tangible property must be deducted from the apportioned value of the franchise, which was ascertained in the first instance by a general deduction of all the tangibles, so that for such year or years no local tax upon the franchise was assessed or paid, the railroad thereunto liable is not discharged, nor is the public estopped from assessing it for such tax in subsequent years. Ibid. Notwithstanding the language of the franchise tax statute in providing for the payment by corporations, in addition to other taxes imposed by law, of a state tax upon their franchises and a local tax thereon in the several subdivisions where they are exercised, and for a state board to value them according to rules, whereby is taken the grand total value of everything possessed by a given corporation subject to the taxes, from which the total value of its tangibles is deducted and the balance deemed the value of its franchise; and in then providing for an apportionment in the case of railroad and other transportation and transmission companies for local franchise taxes according to mileage, "less the value of any tangible property assessed or liable to assessment" in the local district, the local tangible property is not to be taken out a second time. Ibid.

A statute providing that any corpordion aggrieved by a tax levied as an excise upon the value of its capital stock according to the market value of its shares may petition the supreme court in the nature of a petition of right setting forth the amount of the tax or excise and the general legal grounds, if any, for asserting that it should not have been exacted, and the specific facts upon which such assertion rests, confers no jurisdiction to correct errors of judgment resulting merely in an overvaluation of the shares, although the corporation insists that if these had been correctly valued there could and would have been no tax at all assessed, because the lawful deductions for property otherwise taxed exceed the total real value of the shares. Boston Mfg. Co. v. Com. 144 Mass. 598, 12 N. E. 362.

In

To sustain a charge of excessive valuation of corporate property and franchise so as to warrant a court in interfering with an assessment, the proof offered must relate to the values at the time of which the assessment speaks. the absence of any proof but that which relates to an anterior time, the valuation must stand. State, Williams, Prosecutor, v. Bettle, 50 N. J. L. 132, 11 Atl. 17.

In New Jersey a domestic railroad corporation operating a steam surface railway between two cities, and still occasionally using its railroad tracks upon the highways of one of such cities for steam surface railroad purposes; and which in the same connection owns a powerhouse, poles, dynamos, cars, and other equipment of an electric passenger railway operated over the same tracks in such city,-is to be assessed and taxed by the state board of assessors upon its tracks and franchise, and by the municipality upon the electric line and its equipment as property not used for railroad purposes. Camden & A. R. Co. v. Atlantic City, 38 N. J. L. 316, 33 Atl. 198.

Notwithstanding a statute imposing a franchise tax upon a domestic railroad corporation, measured by its gross receipts, points out methods of collection, and reserves no lien upon the property, when a corporation becomes insolvent, and passes into the hands of operating receivers under sequestration proceedings instituted by a judgment creditor, and under mortgage foreclosure for debts exceeding the total assets,--the state may apply directly to the court whose officers such receivers are for and obtain an order directing them to pay the taxes in default out of the gross earnings on hand. Central Trust Co. v. New York City & N. R. Co. 110 N. Y. 250, 1 L. R. A. 260, 18 N. E. 92.

When, under the New York statutes, an application is made to the state comptroller by a domestic railroad corporation for a revision or readjustment of franchise taxes assessed upon it in past years, the affidavit of verfication appended to the petition purporting to be that of an officer of the corporation is not fatally defective in not being signed by the affiant, when he is named therein and has signed the petition. Nor is it insufficient because of qualifying the oath that the facts set up in the petition are true by the words "to the best of the deponent's knowledge and belief." People ▼. Campbell, 88 Hun, 544, 34 N. Y. Supp. 801.

Such a petition affords jurisdiction to the state comptroller to revise and readjust the taxes according to its prayer, when the railroad officer subscribing and verifying it states in the body of it that he has examined the records kept by the railroad during the years involved, and that as shown by said records a certain part of the capital stock was employed without the state during that time, without added proof that the corporate books and records were correct. Ibid.

The courts are not governed by the rules applicable to appeals from judgments in actions at law in reviewing a decision of the comptroller on such an application. The strict rules of evidence in actions do not apply to such a proceeding. The comptroller is not restricted to common-law proof, but may act upon affidavits (citing People er rel. Harlan & H. Co. v. Campbell, 139 N. Y. 65, 34 N. E. 753). He is in fact an assessor, and may determine matters before him upon evidence which would be inadmissible in common-law actions. (Citing People ex rel. Roebling's Sons Co. v. Wemple, 138 N. Y. 582, 34 N. E. 386.) Ibid.

That the state comptroller decided that taxes for a given year should be canceled on the ground that the subject thereof was exempt constitutes no estoppel upon his successor in office from assessing like taxes upon the same subject in later years. People ex rel. New England Dressed Meat & Wool Co. v. Roberts, 155 N. Y. 408, 41 L. R. A. 228, 50 N. E. 53, Reversing 20 App. Div. 521, 47 N. Y. Supp. 123. When a franchise tax against a domestic corporation has been revised by the state comptroller, and a part thereof credited to the corporation as illegally paid, or as made to include taxes which could not have been lawfully demanded, a second domestic corporation, assignee of the first for a part of such credit, is not entitled to have its own tax account reduced by the transferred credit. The power given to the state comptroller to revise and readjust an account for taxes as above, and to charge or credit the difference as the case may require, is not sufficient to require him to transfer a credit. He has no authority to direct the refunding of a tax covered into the state treasury. There is no right in a corporation to offset its claim for taxes unlawfully exacted against the state's claim for other taxes. People ex rel. Western U. Teleg. Co. v. Roberts, 30 App. Div. 78, 51 N. Y. Supp. 747, Affirmed on opinion below in 156 N. Y. 693, 51 N. E. 1093.

Although the New York statute (Laws 1896, chap. 908, § 232) requires the assessors, in making their return to a writ of certiorari to review their action, to set forth, concisely, such other facts as may be pertinent and material to show the value of the property assessed on the roll and the grounds for the valuation, it is improper to insert in a writ to the state board to review an assessment upon the special franchises of a corporation a requirement that the return shall include the manner of making the assessment, the method pursued in making and fixing the valuation, and the basis adopted therefor; since, if such direction be construed to require more than does the statute, it is unauthorized, and if it requires no more, it is unnecessary. People ex rel. Buffalo Natural Gas Fuel Co. v. State Bd. of Tax Comrs. 55 App. Div. 186, 67 N. Y. Supp. 51.

(This is quite the same reason by which the Caliph Omar justified the famous order to burn the Alexandrian library,-if the books conformed to Al Koran they were superfluous, and if they did not they were pernicious.)

There is a strong dissent in the case by Kellogg, J., who took the ground that the phrase. "such other facts as may be pertinent," meant such other facts as the court called upon to review deems to be pertinent.

Under the New York statute for the taxation of special franchises (Laws 1899, chap. 712) the requirement (§ 43) that every corporation subject thereto shall, within thirty days after the act takes effect, or within the like period after a franchise is acquired, furnish a written report to the state tax commissioners as a basis for assessment; and the coupled provision for

the payment of a specific pecuniary penalty for failure to make such report, with an additional diurnal money penalty while the default continues; and a further provision that the corporation thus defaulting shall not be entitled to review its assessment upon certiorari,--the right of review upon certiorari is suspended while the default continues, not absolutely lost, to a corporation assessed upon its special franchise, by the failure to report within the time limit. The right of review may be exercised upon subsequently reporting and satisfying the pecuniary penalties. People ex rel. New York & Q. C. R. Co. v. State Bd. of Tax Comrs. 55 App. Div. 218, 67 N. Y. Sup. 69.

A statute requiring every domestic trust company to pay for the privilege of exercising its corporate franchise, or of carrying on its business in an organized capacity, an annual tax equal to 1 per cent on the amount of its capital stock, surplus, and undivided profits, on or before a named date each year in lieu of and as a substitute for all other assessments and taxation, from which such trust companies are thereby expressly exempted, and which took effect immediately upon its enactment (N. Y. Laws 1901, chap. 132), entitles a trust company that has complied with its terms to recover back a city tax assessed before the act became a law for the year in which it was passed, but not confirmed until afterwards, and which was collected by duress, and paid under protest. Binghamton Trust Co. v. Binghamton, 72 App. Div. 341, 76 N. Y. Supp. 517.

When a state constitution commits to township officers the power and duty of assessing the taxable property in their respective towns, and merely authorizes, without commanding, the legislature to tax franchises; and when the legislature has enacted general laws for taxing real and personal property through the action of township officials, and a particular law for taxing corporate franchises through the action of a state board, the lands, roadbed, superstructures, and other tangible property of a railroad corporation are to be assessed and taxed where they are situated by the local taxing authorities under the general legislation, and the franchise separately and independently by the state board. And if by mistake, mutual on the part of the state board and the railroad, the corporation returns and is assessed and taxed upon, not only its franchise, but all its tangible property as well, and pays such tax, the payment is no defense to the claim of the local authorities for taxes assessed by them upon the tangible property. Wilmington, C. & A. R. Co. v. Brunswick County, 72 N. C. 10; Wilmington R. Bridge Co. v. New Hanover County, 72 N. C. 15.

A charge that a board of equalization assessed corporate franchises for taxation without notice to the corporation is unsubstantiated when it appears that such board, upon an application to reduce the assessment, left the original assessment unchanged, and that the corporate franchises were included therein. Edison Electric Illum. Co. v. Spokane County, 22 Wash. 168, 60 Pac. 132.

The franchises of a street railway corporation and the property necessary for their exercise to discharge quasi public duties, being an entirety, and the franchises being personal estate, the tangible property, such as cars, rails, poles, wires, etc., and the power house or houses and the lots they stand on, are subject to assessment as part of the franchise, and therefore as personal property; hence drawn to the principal office of the corporate owner, and not haing a situs in the wards or assessment districts where these things happen severally to de

situated. State ex rel. Milwaukee Street R. Co. v. Anderson, 90 Wis. 550, 63 N. W. 746.

Such franchises and property are not subject to severance by sale for taxes under the general operation of the tax law, nor upon other legal process. Ibid.; Chicago & N. W. R. Co. v. Forest County, 95 Wis. 80, 70 N. W. 77.

XI. Conclusion.

If the foregoing exposition has left unanswered many questions, it has been inevitable. The subject of taxing corporate franchises is still in the evolutionary stage. The states are continually devising new ways of taxing corporations, and the corporations are stubbornly contesting every new impost. Mr. Thomas Sewell Adams, writing of Taxation in Maryland, for the Johns Hopkins University Studies in History and Political Science, says that in the period from 1776 to 1841 that state taxed corporations exactly like individuals, but customarily imposed upon banks a franchise tax, usually twenty cents on each $100 of paid-up capital, and that in the last two decades of the nineteenth century corporation taxes increased both relatively and absolutely, and many new ones were imposed, adding that, whereas in the ninth decade of the last century these were 13 per cent of the total tax receipts, in the succeeding ten years they had risen to 16 per cent. The case of Maryland is typical.

It is sometimes possible as yet for a few corporations to escape the more grievous burdens by migrating to more liberal jurisdictions (vide, People ex rel. Davis Colby Ore Roaster Co. v. Campbell, 66 Hun, 146, 21 N. Y. Supp. 7; People ex rel. Southern Cotton Oil Co. v. Wemple, 131 N. Y. 64, 29 N. E. 1002; and People ex rel. Southern Cotton Oil Co. v. Roberts, 25 App. Div. 13, 48 N. Y. Supp. 1028), but plainly this plan is not available to all, and the places of refuge are diminishing.

The great question, When is a tax upon a corporation to be considered a franchise tax

rather than one upon its property? is still open. The language of the statute imposing it is not decisive. It may be one or the other despite of the words employed by the legislature. Western U. Teleg. Co. v. Atty. Gen. 125 U. S. 530, 31 L. ed. 790, 8 Sup. Ct. Rep. 961; Western U. Teleg. Co. v. Norman, 77 Fed. 13; Adams Exp. Co. v. Kentucky, 166 U. S. 171, 41 L. ed. 960, 17 Sup. Ct. Rep. 527,-in which avowed franchise taxes that would, if such, have been invalid, were held to be not such; and Maine v. Grand Trunk R. Co. 142 U. S. 217, 35 L. ed. 994, 3 Inters. Com. Rep. 807, 12 Sup. Ct. Rep. 121, 163, where the tax was only saved by a ruling that it was a franchise tax.

Again, notwithstanding the last cited case, it cannot yet be said to be settled that a state exclusively in interstate commerce any tax for may impose upon a foreign corporation engaged the privilege of carrying on such commerce within its borders. At least, Mr. Justice Peckham did not so regard it when writing the opinion in McHenry v. Alford, 168 U. S. 651, 42 L. ed. 614, 18 Sup. Ct. Rep. 242.

But when it is settled that a given tax is an excise, the question as to what the value of the franchise is, and how it shall be determined, is a fruitful source of litigation. Witness the cases of State Bd. of Equalization v. People er rel. Goggin, 191 Ill. 528, 61 N. E. 339, and Chicago Union Traction Co. v. State Bd. of Equalization, 112 Fed. 607, 114 Fed. 557.

The corporation wronged by an excessive valuation may get relief in the courts if it can prove actual fraud by the assessors; not otherwise. There is a remedy for knavishness, possibly, but none for ignorance or stupid obstinacy.

But while all this is so, none the less, the courts have established many guiding principles that must be helpful in solving the new prob lems connected with this subject that are sure to arise. J. B. G.

UNITED STATES CIRCUIT COURT OF APPEALS, SIXTH CIRCUIT.

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NOTE. For an earlier report of this same case, see Hindman v. First Nat. Bank (C. C. App. 6th C.) 48 L. R. A. 210.

As to liability for misrepresentations inducing purchase of corporate stock generally, see in this series Teachout v. Van Hoesen (Iowa) 1 L. R. A. 664; Windram v. French (Mass.) 8 L. R. A. 750; Gerner v. Mosher (Neb.) 46 L. R. A. 244; and Boddy v. Henry (Iowa) 53 L. R. A. 769.

4.

5.

resentations inducing the purchase of corporate stock cannot be limited to the difference in the value of the stock on the day the representations were made and on the day of purchase, if at both dates it was of much less intrinsic value than the price paid for it, but should represent the difference between the price paid and the intrinsic value of the stock as ascertained by events in the subsequent history of the corporation, and not by the market price.

That the discount of subscribers' notes indorsed by an insurance company, by the bank in which they were deposited as capital, was genuine and real, does not prevent its certificate that the company's capital and surplus had been paid in, in cash, from being false and misleading.

That one taking stock in a corpo

As to failure of stockholder to inform one purchasing his stock that the corporation is insolvent, see Rothmiller v. Stein (N. Y.) 26 L. R. A. 148.

As to right to rely upon representations made to effect contract, as a basis for a charge of fraud, see note to Fargo Gaslight & Coke Co. v. Fargo Gas & Electric Co. (N. D.) 37 L. R A. 593.

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