117 U.S. 129 | SCOTUS | 1886
delivered tbe opinion of the court. After stating the facts as above reported, he continued :
It is apparent from the charter that the subscribers of shares and those claiming under them were to be the holders of the stock of the corporation, and that the money paid into the treasury upon subscriptions was to be used by the corporation in building and equipping its railroad. In this way the capital of the corporation was to be converted into the railroad and-; its appurtenances. A tax upon the railroad, therefore, after its completion, is necessarily a tax upon the capital, because, practically, the capital and that into which it has been converted are the same. The railroad of the corporation may be worth more than its capital, but all its capital is in its railroad. Such being the case, the taxation of both railroad and capital would be, so far as the corporation is concerned, double taxation.
In Railroad Companies v. Gaines, 97 U. S. 697, it was held that a provision in the charter of the Memphis & Charleston Railroad Company; precisely like that now under consideration, did not exempt the railroad of that corporation and its appurtenances from taxation after twenty years from the time of its completion, even though the capital stock of the corporation had all been invested in the railroad, because, taking the whole section together, it was apparent such was not the inten-. tion of the legislature. The property was taxable, but the capital stock was exempt.
■ . It is no doubt true that the legislature may make a difference, for the purposes of taxation, between the capital stock of a corporation in the hands of the corporation.itself, and the shares of the same capital stock in the hands of the individual stockholders. That has often been done, and the crises are
In corporations four elements of taxable value are.sometimes found : 1, franchises'; 2, capital stock in the hands of the corporation; 3, corporate property; and, 4, shares of the capi.tal stock in the hands of the individual stockholders. Each of these is, under some circumstances, an appropriate subject of taxation; and it is no doubt :n the power of a State, when
■ This brings us to an examination of the present charter to see what the legislature has expressed its intention of doing. “ The capital stock of said company ” is exempt from taxation. That has been expressly enacted, and the' owner or owners of the stock are necessarily relieved from all taxation- on this account. The important question is, therefore, who are the owners of the capital stock of this corporation within the meaning of the term “capital stock” as used in this - charter, because, in construing statutes which are binding on States as contracts; the words employed are, if possible, to be given the same meaning they had in the minds of the parties to the contract 'when the statute was enacted. In this respect there is no difference between a contract of a State and a contract of a natural per-' son. If the words employed are capable of more than one meaning, that meaning is to be given them which, taking the whole statute together, it is apparent the parties intended they should have.
Returning to the charter, we find that the “ capital stock ” is divided into shares. These shares are to be subscribed and paid for,'and the money raised in this way constitutes .the “capital” of the corporation spoken of in section 12, where it is said, “ the board of directors shall not exceed in their contracts the amount of the capital of the corporation,” &c., and in section 17, where it is provided “ that said company may at any time increase its capital to a sum sufficient to complete the said road.” This capital is to be used by the corporation ■ to build and equip its road, and if more capital is needed for
Prom this it is clear to us that while the money paid in by the subscribers of the shares of the capital stock of the corporation constituted the capital of the corporation which was to be used in building and equipping the railroad, the stock created by such subscription and payment was to belong to and remain as the property of the several holders of the shares so subscribed and paid for. As was shown in Railroad Companies v. Gaines, above cited, the Avords “ capital stock of said company,” and the words “the road with all its fixtures and appurtenances,” were used in the charter to describe different things. The “ capital,” which upon the .payment by the subscribers belonged to the corporation, has been converted into the railroad and its1 appurtenances, and it had no separate existence as a taxable thing after the road was built and=equipped. But the “ capital stock,” divided into shares, subscribed and paid for by' the persons to whom the shares Avere originally issued, still has, and was by the charter intended to have, an existence separate and distinct from the property into which
It follows that the judgment of the Circuit Court was right, and it fs consequently
Affirmed.