United States Supreme Court Cases & Opinions

U.S. Supreme Court

Hawley v. City of Malden, 232 U.S. 1 (1914)

Hawley v. City of Malden

No. 18

Argued March 6, 7, 1913

Decided January 5, 1914

232 U.S. 1

Syllabus

The property of shareholders in their respective shares is distinct from the corporate property, franchises, and capital stock of the corporation itself, and may be separately taxed.

Even if the constitutional validity of the taxation by a shares owned by its citizens of stock of foreign corporations having no property and doing no business therein has not been definitely raised and directly passed upon by this Court, the existence of the authority of the state has invariably been assumed. Darnell v. Indiana, 226 U. S. 390.

In dealing with the intangible interest of a shareholder, there is no question of physical situs, and the jurisdiction to tax such interest is not dependent upon the tangible property of the corporation.

A state has the undoubted right, in creating corporations, to provide for the taxation in that all their shares, whether owned by residents or nonresidents. Corry v. Baltimore, 196 U. S. 496.

Quaere whether, in case of corporations organized under state laws, a provision by the incorporation fixing the situs of shares for the purpose of taxation, by whomsoever owned, would exclude taxation of those shares by other states in which the owners reside.

Page 232 U. S. 2

While it would he an advantage to the country and to individual states if nonconflicting principles of taxation could be agreed upon by the states so as to avoid the taxation of the same property in more than one jurisdiction, the Constitution of the United States doe not go so far. Kidd v. Alabama, 188 U. S. 730.

20 Mass. 138 affirmed.

The facts, which involve the constitutionality under the due process clause of the Fourteenth Amendment of an assessment for taxation under authority of the shares of stock owned by residents of the foreign corporations which did no business and has no property within the state, are stated in the opinion.

Page 232 U. S. 8