115 Va. 180 | Va. | 1913
delivered the opinion of the court.
The first ground of demurrer to the declaration in this case is: “That the tax imposed by the city of Portsmouth on the capital stock of the Portsmouth and Suffolk Water Company for the years 1901, 1902, 1903 and 1904 was not a tax, levy or assessment imposed upon any property or works of the Portsmouth and Suffolk Water Company, or its successors, necessary for the supply of ivater, as contemplated by the provisions of the contract between the city of Portsmouth and the Portsmouth and Suffolk Water Company, as set out in the plaintiff’s declaration. ...”
One of the provisions of the contract set out in the declaration is that “if at any time any city taxes, levies or assessments for any public purpose should be imposed on the property or works necessary for the supply of water, as set out in said contract, the annual rental above set out should be increased to an amount equal to said city taxes, levies or assessments. . . .” Had the declaration stopped there, there would have been much force in the contention of the defendant, but it goes on to state that during the years 1901, 1902, 1903 and 1904 city taxes for public purposes were imposed to the amount of $1,312.50 for each of said years on the capital stock of the Portsmouth and Suffolk Water Company, all of which capital stock was invested in and represented by the property and works necessary for the supply of water, amounting in the aggregate for said four years to $5,250.00, which
In Farrington v. State of Tennessee, 95 U. S. 686, 24 L. Ed. 558, it is said: “The capital stock and shares of the capital stock are distinct things. The capital stock is money paid or authorized,, or required to be paid as a basis of the business of the bank and the means of conducting its operations. It represents whatever it may be invested in.”
And in State Bank of Va. v. Richmond, 79 Va. 115, it is said: “The capital stock and the shares of the capital stock are distinct things. The capital stock and shares may both be taxable and it is not double taxation.”
As is said in the brief for¡ the defendant in error, there is some confusion among the authorities in their definition of capital stock, the term sometimes being applied to the shares of stock in the hands of stockholders.
In Cook on Stock and Stockholders (2nd ed.), section B, it is said: “Strictly the capital stock of a corporation is the money contributed by the corporators to the capital, and is usually represented by shares issued to subscribers to the stock on the initiation of the corporate enterprise.”
And in 10 Cyc., at page 364: “The term ‘capital stock’ in an act of incorporation is said to mean the amount contributed or advanced by the shareholders as members of the company, and does not refer to the tangible property of the corporation.”
But whatever obscurity or confusion may elsewhere exist as to the precise meaning and force of the term “capital stock,” the averments of the declaration before us, ad
The first ground of demurrer is, therefore, overruled.
The second ground of demurrer is: “That the plaintiffs, not being parties to the contract between the defendant and Portsmouth and Suffolk Water Company, mentioned in the declaration, and not being the assignees of said contract, or any part thereof, but the assignees of, if anything, only a mere chose in action, to-wit, the additional rental alleged to be due by the defendant to the Portsmouth and Suffolk Water Company for the years 1901, 1902, 1903 and 1904, cannot maintain this action in their own names for the violation of any rights growing out of said contract.”
It is not claimed in the declaration that the contract between the Portsmouth and Suffolk Water Company and the city of Portsmouth was ever assigned to the plaintiffs. The contention is that the plaintiffs are the assignees of a debt due to the Water Company, and that claim is a chose in action within the terms of section 2860 of the Code. In reference to this section, Barton, in the first volume of his Practice (end ’ed.), p. 236, says that “it now includes also open accounts in the use of the words ‘or other chose in action,’ upon which now suit may be brought in the name of the assignee, although formerly it could be only for his benefit. The language of the statute covers the right of the assignee or beneficial owner to assert in his own name the right to recover on any chose in action, whereas the former statute left every other instance except those specified in the language of the act to the rules as they were at common law.”
If the premises were sound, the conclusion would follow; but is the contract stated in the declaration an exemption of the property and works of the company from taxation?
In Grant v. City of Davenport, 36 Ia. 396, the ordinance construed was assailed as violative of article 8, section 2, of the Constitution, which declares that the property of corporations shall be liable to taxation the same as the property of individuals. “If,” said the court, “we placed the same construction upon the ordinance as the counsel for. appellants seems to, we should probably concur with him in his legal positions and conclusions thereon. But it seems to us that when the whole ordinance is construed together, it does not amount to an exemption from taxation. It, in effect, applies the taxes, as they would otherwise become due, in part payment of, or in part consideration for, the water rent. The city pays the amount of money specified and the taxes upon the franchise and the property required for the management of the works as water rent. It might have required the payment of the taxes, and then returned the amount as part pay for water rent. The manner of doing it cannot defeat the power to do it.”
In Ludington Water Supply Co. v. City of Ludington, 119 Mich. 188, 79 N. W. 561, it was contended that the provisions of the contract under consideration relating to taxes were invalid for the reason that the city had no power, under its charter, to exempt property from taxation, and that this contract was an attempt to exempt the property of the plaintiff in excess of a certain amount from its share of the public burden. The opinion says: “The contract does not purport to provide that the property of the plaintiff shall not be assessed. Its terms indicate that it was intended by both parties that it would be assessed, and that the plaintiff would pay the taxes on the property up to a certain amount, and the defendant all in excess, as a part of the consideration for the supply of water. The city no more exempts the property of the plaintiff from taxation by such an agreement than does the mortgager who agrees to pay the taxes levied against the mortgaged property exempt the mortgaged property from taxation. Possibly neither possesses the power to exempt property from taxation. Certainly neither has done it.”
In Cartersville, &c., Co. v. Mayor, &c., of Cartersville, 89 Ga. 683, 16 S. E. 25, it was held, that “while a city cannot exempt a gas company from municipal taxation, it can contract to pay for gas a stipulated sum per lamp, and in
We are of opinion that the third ground of demurrer is insufficient.
The fourth ground of demurrer is: “That the declaration does not allege facts sufficient to show; that the payments of the taxes complained of were involuntary or were made under such circumstances as would 'entitle the Portsmouth and Suffolk Water Company, or its successors, or the plaintiffs, to recover the same.”
This ground applies to the second count in the declaration and raises the question frequently presented as to whether or not a payment of taxes was voluntary or involuntary within the meaning of the law. If voluntary, they cannot be recovered back; if involuntary, the recovery may often be had.
It is contended by the plaintiffs in error that the payments here were involuntary, because the ordinance under which the tax was levied imposed a penalty of five per cent, if the tax was not paid when due. The claim of plaintiffs in error is that the imposition of a penalty is a species of duress, and that where the tax is paid to avoid this additional burden, it is altogether different from the payment of a tax and th'e claim that it was involuntary merely because the tax was illegal.
What we have said sufficiently disposes of the fifth ground of demurrer; and upon the whole case we are of opinion that the court erred in sustaining the demurrer to the first count in the declaration, but properly sustained the demurrer to the second count ,and for the error in its ruling with respect to the first count its judgment must be reversed.
Reversed.