Corry v. Baltimore,
196 U.S. 466 (1905)

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U.S. Supreme Court

Corry v. Baltimore, 196 U.S. 466 (1905)

Corry v. Baltimore

No. 86

Argued December 6, 1904

Decided February 20, 1905

196 U.S. 466


The sovereign that creates a corporation has the incidental right to impose reasonable regulations concerning the ownership of stock therein, and it is not an unreasonable regulation to establish the situs of stock for purposes of taxation at the principal office of the corporation, whether owned by residents or nonresidents, and to compel the corporation to pay the tax for the stockholders, giving it a right of recovery therefor against the stockholders and a lien on the stock.

Where valid according to the laws of the state, such a regulation does not deprive the stockholder of his property without due process of law either because it is an exercise of the taxing power of the state over persons and things not within its jurisdiction or because notice of the assessment is not given to each stockholder, provided notice is given to the corporation and the statute, either in terms or as construed by the state court, constitutes the corporation the agent of the stockholders to receive notice and to represent them in proceedings for the correction of the assessment.

While the liability of nonresident stockholders for taxes on his stock may not be expressed in the charter of the company if it existed in the general laws of the state at the time of the creation of the corporation or the extension of its charter, and the constitution of the state also contained at such times the reserved right to alter, amend and repeal, those provisions of the constitution and general laws of the state are as much a part of the charter as if expressly embodied therein.

Page 196 U. S. 467

The New York & Baltimore Transportation Line was chartered in 1847 by the General Assembly of Maryland, and it still exists by virtue of an extension in 1876 of its charter. At all times, the corporation has maintained its principal office in the City of Baltimore.

James C. Corry, a resident and citizen of Pennsylvania, acquired one hundred fifty shares of the stock of the transportation line, having a face value of twenty dollars per share.

The one hundred fifty shares standing in Corry's name, as stated, were assessed for the years 1899 and 1900 for state and the municipal taxes of the City of Baltimore, the total taxes being $43.27 for the year 1899 and $36.49 for the year 1900. Conformably to the laws of Maryland, payment of said taxes was demanded of the transportation company. To restrain compliance with this demand, Corry commenced the present suit, making defendants to the bill of complaint the mayor and council of Baltimore, the treasurer of the city, the treasurer of the state, and the transportation company. The relief prayed was based on averments that the laws of Maryland under which the taxes were levied were repugnant to the state and federal Constitutions upon grounds specified in the bill. A decree was entered sustaining general demurrers interposed by the various defendants and dismissing the bill. This was affirmed by the Court of Appeals of Maryland. 96 Md. 310.

Page 196 U. S. 471

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