chap, vni.] CORPORATION AND STATE. [§ 477a. separately from its property. 1 Further, the capital stock of a corporation is distinct from the shares of its capital stock, which represent or constitute the legal interest of the share- holders in the corporate property; 2 consequently, both the capital stock and the shares thereof in the hands of share- holders may be taxed, and still there be no double taxation. 3 As Justice Nelson said, giving the opinion of the Federal Supreme Court in Tan Allen v. Assessors : " The tax on shares is not a tax on the capital of the bank. The corporation is the legal owner of all the property of the bank. . . . The interest of the shareholder entitles him to participate in the net profits earned by the bank in the employment of its capital, during the existence of its charter, in proportion to the number of his shares ; and upon its dissolution or termination, to his proportion of that which may remain of the corporation after the payment of its debts. This is a distinct independent inter- est or property held by the shareholder, like any other property that may belong to him." 4 1 Wilmington, C. and A. Railroad Company v. Board of Commissioners, 72 N. C. 10. For cases on the valua- tion of capital stock and franchises, see State Railroad Tax Cases, 92 U. S. 575; Railroad Co. v. Vance, 96 U. S. 450; Railway Co. v. Backus, 154 U. S. 421; Adams Exp. Co. v. Ohio, 166 U. S. 185; Boston & L. R. R. Co. v. Commonwealth, 100 Mass. 399; Peo- ple v. Equitable Trust Co., 96 N. Y. 387; People v. Coleman, 107 N. Y. 541. When the statute requires the capi- tal stock of a corporation to be as- sessed at its "actual value," it should be estimated above or below par, according to the fact. Oswego Starch Factory v. Dolloway, 21 N. Y. 449. 2 Farrington v. Tennessee, 95 U". S. 679, 686; New Orleans v. Houston, 119 U. S. 265; State Bk. o. City of Richmond, 79 Va. 113; Porter v. Rockford, etc., R, R. Co., 76 111. 561; Greenleaf v. Board of Review, 184 111. 226; State v. Bank, 95 Tenn. 222; Commonwealth v. Building Co., 90 Va. 790; Allen v. Com., 98 Va. 80; Jefferson Co. Sav. B'k v. Hewitt, 112 Ala. 546. A tax upon the undis- tributed surplus of a railroad com- pany is not a tax upon a stock divi- dend thereafter declared, and a mu- nicipal corporation holding stock in such railroad is not entitled to re- cover back a proportion of the tax so paid. Logan County v. United States, 169 U. S. 255. 3 Cases in last note. But see Che- shire County Telephone Co. v. State, 63 N. H. 167. A statute requiring the corporation to pay a tax on the shares of its stock irrespective of the fact whether there are dividends or not, is substantially a tax on the corporation. New Orleaus v. Hous- ton, 119 U. S. 265. 4 3 Wall. 573, 583. See §§ 483, 484. For purposes of taxation the situs of shares is at the residence of the owner, unless otherwise declared by 479
