valuable, and through it an income is derived. That right may with propriety be taxed. The obligation to pay is a burden, and has never, to our knowledge, been the subject of taxation. It seems, therefore, that the appropriate place to tax money at interest is where the creditor resides, and that for that purpose it may with propriety be said to be located with the creditor."[1]
The respondent attached much importance to the analogy "between a money demand, evidenced by a note or bond, and shares of stock in a corporation"; and to the fact that the United States Supreme Court had decided that shares of stock in national banks are property, separate and distinct from the property of the corporations which they represent, and are taxable" (National Bank vs. Commonwealth, 9 Wall., 353).
Reference was also made to the case of Minot vs. The Philadelphia, Wilmington & Baltimore Railroad Company, in which the United States Supreme Court was held to have recognized a distinction between shares of railroad stock and the capital (property) of a corporation, and in respect to which it was assumed that the court maintained that the share of a stockholder is something different from the capital stock of a company; the latter being the property of the company only, while the former is the individual interest of the stockholder, constituting his right to a proportional part of the dividends when declared and to a proportional part of the effects of the corporation when dissolved after payment of its debts. Regarded in that aspect, it was held to be an interest or right which accompanies the person of the owner and having no locality independent of its domicile.
But whether, when thus regarded, it can be treated as so far separable from the property to which it relates as to be taxable independent of the locality of the latter, was a question which the counsel of the State did not hold to be decided; but there was a strong intimation that the United States Court intended to decide that shares of railroad stock can only be taxed in the State where the owner resides.
Case for the Petitioners.—On the other hand, the following is a summary of the arguments and reasons advanced (mainly by one of the most learned and distinguished members of the Court of Errors of the State, and of the American Bar, Hon. L. F. S. Foster, formerly president of the United States Senate and acting Vice-President of the United States), in support of the petition for an injunction in restraint of the collection of a tax upon the plaintiff:
- ↑ Reference in this connection is made to the opinions on this general subject expressed by the Supreme Court of California, given in chapter xvi, Popular Science Monthly, pp. 651-653.
