
    Lander, Treasurer of Cuyahoga County, v. Burke.
    
      Investments by domestic corporation stockholders not exempt from taxation — Except when property is taxed in this state in corporation name — Section 27J/6, Rev. Stat. — Domestic corporation does not cease to be such by accepting grant or property' in foreign state.
    
    1. Investments by residents of tbis state in tbe shares of stock of a corporation, whether domestic or foreign, are not exempt from taxation under section 2746 of the Revised Statutes, except when the property of the corporation is taxed in its name in this state.
    2. A corporation organized under the laws of this state does not cease to be such, nor become a foreign corporation, by accepting from another state or country a grant of the privilege of owning and using real and other property therein necessary or convenient in carrying on its corporate business.
    (Decided February 4, 1902.)
    
      Error to the Circuit Court of Cuyahoga county.
    Theaction belowwas broughtby Stevenson Burke to enjoin the treasurer of Cuyahoga county from collecting taxes on various bonds and stocks which the auditor of that county, acting under sections 2781 and 2782, of the Revised Statutes, entered upon the duplicate for 1892, and charged thereon against the plaintiff, for that and the preceding five years. After the suit was brought all of the matters involved in the petition were adjusted and settled by the parties, except those which relate to the taxation of the shares of stock of the Canadian Copper Company, and the Anglo American Iron Company, owned by the plaintiff during the years in question. The action thereafter proceeded as one to enjoin the taxes assessed on those shares of stock, and the other allegations of the petition have become unimportant. With respect to those stocks the petition alleges, that the plaintiff, a citizen and resident of the city of Cleveland, owned and held 1750 shares of the stock of the Canadian Copper Company during each of the years 1887, 1888, and 1889; that he owned 2420 shares during 1890, and 2875 shares during each of the years 1891 and 1892; that he owned during each of the years 1890, 1891, and 3 892, 5000 shares of the stock of the Anglo American Iron Company; and, that he was the owner of no other shares of stock in either of those companies. The petition further avers that the stocks of both companies are altogether speculative, that they never paid any dividend or income of any kind, and are ■without any market value; and that, if the shares held by the plaintiff were subject to taxation in this state, the extreme value which should be assessed on the stock of the Copper company should not exceed $10 per share, and on the Iron company $3 per share. The petition then avers that both of said companies are Ohio corporations, organized and existing under the laws of this state, and were such during the years mentioned, each company during that period, and still, having its principal office in the county of Cuyahoga; that the property of each company is subject to taxation in this state, like other Ohio corporations; “and that, its stocks in the hands of its holders is expressly exempted from taxation under the statutes of Ohio, and the plaintiff was not by the law of Ohio under any obligation to return the said shares or any of them for taxation.” And the plaintiff avers that, he “omitted the said shares from his return, in good faith, after careful investigation, fully believing that he was not bound to return the same for taxation during any of said years.”
    The answer admits that the county auditor entered upon the duplicate of 1892, the shares of stock held by the plaintiff in the two companies referred to, charged up the taxes upon the same at the valuation fixed by the auditor, as alleged in the petition, and placed the duplicate in the hands of the treasurer for collection from the plaintiff. And, it alleges that none of the shares of stock of either company, so entered, “are or were shares of the capital stock of any company the capital stock of which was, at any of the times named in said petition, taxed in the name of such company in the state of Ohio.”
    The answer further admits that both said companies “were originally incorporated under the laws of this state, and that the principal office of each of said companies is, and was during all the time since the incorporation thereof, in the city of Cleveland, which incorporation, as to each of said companies, was had before the year 1887.” But it avers that all of the property, estate, assets, and plant representing the aggregate capital of “each of said companies, during all the years for which the said taxes were so charged upon the tax duplicate of said Cuyahoga county against the said plaintiff, as set forth and charged in his petition in this cause, (except less than one per cent, of the property of the Copper company for the year 1892) were located without the state of Ohio, and within the Dominion of Canada, and were during all of that time outside of the taxable jurisdiction of the state of Ohio, and so have been at all times since the incorporation of said companies.” It is then alleged -in the answer that in June, 1899, the Copper company,under certain acts of the Canadian parliament, acquired by grant from the duly constituted authorities of that government, the right and power to purchase and own real estate, for mining purposes, and to mine for ores, minerals and other substances, to buy and sell ores, minerals and other substances, and to manufacture the same into forms in which they are or can be used, and the like powers, privileges and rights for the due carrying on within the Province of Ontario, of its business, as completely as if the said company had been incorporated under the said Ontario Companies act, and to which said license, by express grant thereof, there was added the further right to hold lands theretofore acquired, and which said license and every part thereof is now still in full force and effect.” Similar allegations are made with respect to the grant of like rights by the Canadian parliament to the Iron company. The answer also contained a denial of the allegations of the petition, not expressly admitted.
    A general demurrer to this answer was sustained by the common pleas, and a perpetual injunction entered restraining the collection of the taxes as prayed for by the plaintiff.
    The case was taken to the circuit court on appeal where a like judgment was entered, from which the county treasurer has prosecuted error to this court.
    
      P.H. Kaiser; P. L. Taft; G. W. 'Gollister and Grant & Bieber, for plaintiff in error, cited the following authorities: '
    
      Myers v. Seaberger, 45 Ohio St., 232; Insurance Co. v. Ratterman, 46 Ohio St., 153; Railway Co. v. Supervisors, 93 U. S., 595; Tucker v. Furguson, 89 U. S. (22 Wall.), 527; Bradley v. Bauder, 36 Ohio St., 28; Sturges v. Carter, 114 U. S., 511; Van Allen v. Assessors, 70 U. S. (3 Wall.), 573; People v. Commissioners, 71 U. S. (4 Wall.), 244; Farrington v. Tennessee, 95 U. S., 679; Tennessee v. Whitworth, 117 U. S. 129; Jones v. Davis, 35 Ohio St., 474; Hubbard v. Brush, 61 Ohio St., 252; Lee v. Sturges, 46 Ohio St., 153; Cincinnati College v. State, 19 Ohio, 110; Railroad v. Dennis, 116 U. S., 665; Railroad v. Guffey, 120 U. S., 569; Cooley on Taxation, (2 ed.) 204; Gager v. Prout, 48 Ohio St., 89; Ratterman v. Ingalls, 48 Ohio St., 468; Rheinboldt v. Raine, 52 Ohio St., 160; County of Redwood v. Winona Land Co., 40 Minn., 512; Weyerhaueser v. Minnesota, 176 U. S., 550; Thomas v. Dakin, 22 Wend., 9.
    
      Stevenson Burke and H. H. Poppleton, for defendant in error, cited the following authorities:
    
      Jones v. Davis, 35 Ohio St., 744; Lee v. Sturges, 46 Ohio St., 153; State v. Sherman, 22 Ohio St., 411; Railroad Co. v. Trust Co., 174 U. S., 552; Railroad Co. v. Railroad Co., 118 U. S., 290; Goodlet v. 
      Railroad Co., 122 U. S., 391; Railway Co. v. James, 161 U. S., 545; Martin v. Railroad Co., 151 U. S., 673; Railroad Co. v. Harris, 79 U. S. (12 Wall.), 65; Bible Society v. Marshall, 15 Ohio St., 537.
   Williams, J.

The controlling facts which are admitted, are (1) that the Canadian Copper Company, and the Anglo American Iron Company., are both corporations organized under the laws of this state, in 1886, and have since continued to be such corporations, each haying its principal office in the city of Cleveland; (2) that since the incorporation of each company its property, except some inconsequential part, has been situated in the Dominion of Canada, beyond the taxing jurisdiction of this state, and has not been taxed nor returned for taxation in this state; and (3) that the defendant in error, was during that time, and still is a citzen and resident of the city of Cleveland, and the owner of a number of the shares of the stock of each of the companies, as alleged in his petition, which he omitted to return for taxation, and the county auditor caused the same to be entered on the duplicate of Cuyahoga county, and charged thereon against the defendant in error, the current taxes for the omitted years, with the statutory penalties;

These taxes it is claimed were illegally assessed and should be enjoined for the reason that the shares of stock held by the defendant in error in each of the corporations are exempt from taxation. This exemption is sought to be sustained under the provision of sections 2744, and 2746, of the Revised Statutes, which, as claimed by counsel, should be considered and construed together. They read as follows:

“Section 2744: The president, secretary, and principal accounting officer of every canal or slackwater navigation company, turnpike company, plank-rqad company, bridge company, insurance company, telegraph company, or other joint stock company, except banking or other corporations whose taxation is specifically provided for, for whatever purpose they may have been created, whether incorporated by any law of this state or not, shall list for taxation, verified by the oath of the person so listing, all the personal property, which shall be held to include all such real estate as is necessary to the daily operations of the company, moneys and credits of such company or corporation within the state, at the actual value in money, in manner following: In all cases return shall be made to the several auditors of the respective counties where such property may be situated, together with a statement of the amount of said property which is situated in each township, village, city or ward therein. The value of all movable property shall be added to the stationary and fixed property and real estate and apportioned to such wards, cities, villages, or townships, pro rata, in proportion to the value of the real estate and fixed property in said ward, city, village, or township, and all property so listed shall be subject to and pay the same taxes as other property listed in such ward, city, village or township. It shall be the duty of the accounting officer aforesaid to make return to the auditor of state during the month of May of each year of the aggregate amount of all property by him returned to the several auditors of the respective counties in which the same may be located. It shall be the duty of the auditor of each county, on or before the first Monday of May, annually, to furnish the aforesaid president, secretary, principal accounting officer, or agent the necessary blanks for the purpose of making aforesaid returns; but no neglect or failure on the part of the county auditor to furnish such blanks shall excuse any such president, secretary, principal accountant, or agent, from making the returns within the time specified herein. If the county auditor to whom returns are made is of the opinion that false or incorrect valuations have been made, or that the property of the corporation or association has not been listed at its full value, or that it has not been listed in the location where it properly belongs, or in cases where no return has been made to the county auditor, he is hereby required to proceed to have the same valued and assessed: provided, that nothing in this section shall be so construed as to tax any stock or interest in any joint stock company held by the state.”

Section 2746: “Personal property of every descrip' .tion, moneys and credits, investments in bonds, stocks, joint stock companies, or otherwise, shall be listed in the name of the person who was the owner thereof on the day preceding the second Monday of April, in each year; but no person shall be required to list for taxation any share or shares of the capital stock of any company, the capital stock of which is taxed in the name of such company.”

Inasmuch as the capital stock of neither of the companies in question has ever been taxed in this state in the name of the company, the claimed exemption of the investments in their stocks, is not within the express terms of section 2746. The argument in support of that claim, when brought to its final analysis, is that, because all domestic corporations are required by section 2744, to list for taxation all of their personal property within the state, the provision of section 2746, for the exemption of investments in their stocks, becomes applicable and operative, though in fact no return is made of, nor tax imposed on the property of the corporation. In other words, it is urged that the requirement imposed upon such corporations to make return of their property, takes the place of actual return and taxation, ..and makes the exemption available, though the requirement be not complied with; the test of the exemption being, it is said, not in the location or situs of the property, nor in the fact of its actual taxation, but solely in the fact that the corporation is a domestic one, which is required to list its property. That construction, it must be admitted, changes, and somewhat enlarges the terms of the exemption as expressed in the statute. It will be observed that no distinction is made by section 2744 between domestic and foreign corporations with respect to their duty of listing their property for taxation. Its language is that, every corporation (except those whose taxation is otherwise specifically provided for) “for whatever purpose they may have been created, whether incorporated by any law of this state or not, shall list for taxation, all the personal property, which shall be held to include all such real estate as.is necessary to the daily operations of the company, moneys and credits of such company or corporation within the state, at the actual value in money,” etc. Nor is any distinction made by section 2746, with respect to the right of exemption from taxation of investments in the stocks of domestic corporations, and in those of foreign corporations. Its language is that, “no person shall be required to list for taxation any share or shares of the capital stock of any company, the capital stock of which is taxed in the name of such company.” So that, investments in the stocks of any corporation, foreign as well as domestic, are exempt from taxation when the capital stock of the corporation is taxed in its name in this state; and no investment in the stocks of either class of corporations is so exempt, unless its capital stock is so taxed in its name. The obligation imposed by the statute upon each class of corporations to return their property for taxation, is not equivalent to its actual return and taxation, nor sufficient to entitle the shareholder to the exemption of his shares from taxation. The purpose of this provision of section 2746, was, as is declared in Bradley v. Bauder, 36 Ohio St., 28, “to exempt from taxation the shares of stock in (all ) corporations, where the state had exercised the right to tax the capital stock in the name of the company,” but not otherwise. The right of exemption, therefore, cannot arise where the property of the corporation is situated without the limits and taxing jurisdiction of the state, for in such case there is no means by which the right or power of the state to tax the property in the name of the corporation can be exercised. It seems to be settled by the former adjudications of this court that the term “capital stock,” as used in section 2746, includes the personal property which by section 2744, corporations are required to return for taxation: Jones v. Davis, 35 Ohio St., 476; Lee v. Sturges, 46 Ohio St., 160; Hubbard v. Brush, 61 Ohio St., 255; Sturges v. Carter, 114 U. S., 511. And, since our taxing statutes can have no extra territorial operation, nor the taxing power of the state be exercised beyond is territorial limits, the tangible property of domestic corporations situated outside of the state necessarily escapes taxation here. Shares of their stock, however, held by citizens of this state, are within the control of the statute, and are made the subject of taxation separate and distinct from the corporate property. Investments in corporate stocks are classified with investments in bonds and other securities, and the former like the latter are generally income producing and profitable investments, and subject to the same rules of taxation, except, however, that the former are exempted from taxation under the statute, when the property of the corporation is taxed in this state. The right to this exemption does not depend upon whether the corporation is a foreign or domestic one, nor on the statutory duty to make return of its corporate property, but upon its actual return and taxation in this state. Hubbard v. Brush, 61 Ohio St., 252. This is as far as any right of exemption is expressly given. The court is without power to enlarge it. The statutory rule on the subject is contained .in section 2731, which provides that: “All property whether real or personal in this state, and whether belonging to individuals or corporations; and all moneys, credits, investments in bonds, stocks, or otherwise, of persons residing in this state, shall be subject to taxation, except only such as may be expressly exempted therefrom.” And it is the rule adopted by the courts that there can be no exemption of property from taxation unless the right of exemption is plainly expressed. Lee v. Sturges, 46 Ohio St., 157; Cincinnati v. State, 19 Ohio, 110, 115; Sturges v. Carter, 114 U. S., 511.

It is argued by counsel for the plaintiff in error that the two companies in question became foreign corporations by accepting from the Canadian government grants of the right to purchase and own real estate in that dominion for mining purposes, and to work the same, and the ore obtained in the carrying on of their business. In the view we have taken of the case, as already expressed, this question is not so important. If it were otherwise, the authorities cited by counsel would require a negative answer to the question. We think the courts below erred in sustaining the demurrer to the answer, and their judgments are,

Reversed and cause remanded with instructions to overrule the demurrer, and for further proceedings.

Minshall, C. J., Burket and Speak, JJ., concur.

Davis, J.

I dissent from the first proposition of the syllabus and from the judgment of reversal. Revised Statutes,' section 2744, has nothing to do with the question before the court. It' merely provides that all corporations, domestic or foreign, shall return for taxation their property which may be within the state. It doese not require corporations to return for taxation property which may not be within the state. It does not follow, therefore, that “inasmuch as the capital -stock of neither of the corporations in question has ever been taxed in this state in the name of the company, the claimed exemption of the investments in their stocks, is not toithin the express terms of section 2746.” The exemption claimed is provided for, if at all, in the last clause of section 2746, as follows: “but no person shall be required to list for taxation any, shares of the capital stock of any company the capital stock of which is taxed in the name of such company.” This clause makes no distinction between foreign and domestic corporations, nor does it prescribe where the capital stock shall be taxed, whether at home or abroad. The obvious purpose of the legislature was to avoid double taxation, for no amount of casuistry can justify double taxation in foro conscientiae. It is held by this court that for the purposes of taxation the capital stock is represented by whatever it is invested in. Jones v. Davis, 35 Ohio St., 476, 477. Upon this theory, if these corporations should be taxed on their property in Canada there would be no justice in compelling a citizen of Ohio to pay tax again on the same property merely because he is the holder of certificates of shares in the capital stock and lives in Ohio. And so, in my judgment, the legislature advisedly and intentionally made the unqualified exemption contained in section 2746, and it is pure legislation for this court to insert the word “domestic” before the word “company” and the words “in this state” after the word “taxed.” If the statute needs amendment, it is the province of the general assembly and not of the Supreme Court to amend it. '  