66 N. E. 93; State v. Covington & C. Bridge Co. 84 Ohio St. 489, 95 N. E. 1155; Board of Education v. Board of Education, 46 Ohio St. 595, 22 N. E. 641; The Messenger v. Pressler, 13 Ohio St. 255; Buck v. Beach, 206 U. S. 392, 51 L. ed. 1106, 27 Sup. Ct. Rep. 712, 11 Ann. Cas. 732.

Statutes should not be so construed as to make them unconstitutional, or raise questions of constitutionality.

Burt v. Rattle, 31 Ohio St. 116; Fox v. Washington, 236 U. S. 273, 59 L. ed. 573, 35 Sup. Ct. Rep. 383; United States v. Jin Fuey Moy, 241 U. S. 401, 60 L. ed. 1064, 36 Sup. Ct. Rep. 658, Ann. Cas. 1917D, 854.

If there is any specific reference in the statutes to the membership in question, it is contained in the section relating to rights and privileges belonging or appertaining to real estate which, if located outside the state, are not to be taxed.

Selliger v. Kentucky, 213 U. S. 200, 53 L. ed. 761, 29 Sup. Ct. Rep. 449; Hubbard v. Brush, 61 Ohio St. 252, 55 N. E. 829; Toledo Commercial Co. v. Glen Mfg. Co. 55 Ohio St. 217, 45 N. E. 197; People ex rel. Lemmon v. Feitner, 167 N. Y. 1, 82 Am. St. Rep. 698, 60 N. E. 265; Baltimore v. Johnson, 96 Md. 737, 61 L.R.A. 568, 54 Atl. 646; Horrigan v. Mendelson, 18 Ohio N. P. N. S. 596; Standard Gas Power Co. v. Standard Gas Power Co. 224 Fed. 990; Murphy v. Ford Motor Co. 241 Fed. 134; State v. McPhail, 124 Minn. 398, 50 L.R.A.(N.S.) 255, 145 N. W. 108, Ann. Cas. 1915C, 538; State ex rel. Goetzman v. Minnesota Tax Commission, 136 Minn. 260, 161 N. W. 516.

For Ohio to attempt to tax this membership will be a taking of property without due process of law, in violation of the Constitutions of Ohio and of the United States.

Louisville & J. Ferry Co. v. Kentucky, 188 U. S. 385, 47 L. ed. 513, 23 Sup. Ct. Rep. 463; Hawley v. Malden, 232 U. S. 1, 58 L. ed. 477, 34 Sup. Ct. Rep. 201, Ann. Cas. 1916C, 842; Fidelity & C. Trust Co. v. Louisville, 245 U. S. 54, 62 L. ed. 145, L.R.A. 1918C, 124, 38 Sup. Ct. Rep. 40.

Messrs. Louis H. Capelle and S. C. Roettinger, for defendants in error:

A membership in a stock exchange is property and taxable.

Rogers v. Hennepin County, 240 U. S. 184, 60 L. ed. 594, 36 Sup. Ct. Rep. 265; Hyde v. Woods, 94 U. S. 523, 24 L. ed. 264; Sparhawk v. Yerkes, 142 U. S. 1, 35 L. ed. 915, 12 Sup. Ct. Rep.

104; Page v Edmunds, 187 U. S. 596, 47 L. ed. 318, 23 Sup. Ct. Rep. 200; Van Allen v. Assessors (Churchill v. Utica) 3 Wall. 573, 18 L. ed. 229; Farrington v. Tennessee, 95 U. S. 679, 24 L. ed. 558; Davidson v. New Orleans, 96 U. S. 97, 24 L. ed. 616; State v. McPhail, 124 Minn. 398, 50 L.R.A. (N.S.) 255, 148 N. W. 108, Ann. Cas. 1915C, 538; Platt v. Jones, 96 N. Y. 24; Re Currie, 107 C. C. A. 369, 185 Fed. 263; Powell v. Waldron, 89 N. Y. 328, 42 Am. Rep. 301; Nashua Sav. Bank v. Abbott, 181 Mass. 531, 92 Am. St. Rep. 430, 63 N. E. 1058; O'Dell v. Boyden, 80 C. C. A. 397, 150 Fed. 731, 10 Ann. Cas. 239; Re Hellman, 174 N. Y. 254, 95 Am. St. Rep. 582, 66 N. E. 809; Kirtland v. Hotchkiss, 100 U. S. 491, 25 L. ed. 558; Bonaparte v. Tax Court, 104 U. S. 592, 26 L. ed. 845; Covington v. First Nat. Bank, 198 U. S. 100, 49 L. ed. 963, 25 Sup. Ct. Rep. 562; Southern P. Co. v. Kentucky, 222 U. S. 63, 56 L. ed. 96, 32 Sup. Ct. Rep. 13; Cooley, Taxn. 3d ed. 26, 89; Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 50 L. ed. 150, 26 Sup. Ct. Rep. 36, 4 Ann. Cas. 493; State Tax on Foreign-held Bonds, 15 Wall. 300, 21 L. ed. 179.

Stock, or shares such as those under consideration, are personal property, no matter where the corporation is or may be situate.

Lee v. Sturges, 46 Ohio St. 153, 2 L.R.A. 556, 19 N. E. 560; West Wisconsin R. Co. v. Trempealeau County, 93 U. S. 595, 23 L. ed. 814; Tucker v. Ferguson, 22 Wall. 527, 22 L. ed. 805; Bradley v. Bauder, 36 Ohio St. 28, 38 Am. Rep. 547; Hawley v. Malden, 232 U. S. 1, 58 L. ed. 477, 34 Sup. Ct. Rep. 201, Ann. Cas. 1916C, 842; Exchange Bank v. Hines, 3 Ohio St. 1; Zanesville v. Richards, 5 Ohio St. 589; Cincinnati v. Connor, 55 Ohio St. 82, 44 N. E. 582.

Per Curiam:

Is the membership in the New York Stock Exchange property? If so, is the situs of the property at the domicil of the owner? If these questions are answered in the affirmative, do the statutes of Ohio provide for its taxation?

The record shows that the membership is a valuable right. The privileges of a member are not only valuable in their use, but the mem

bership has a market value. Plaintiff paid more than $60,000 for his seat. The Stock Exchange owns the entire capital stock of the Exchange Building Company, which owns the real estate in which the business is conducted. Facilities are furnished for the conduct of brokerage business by members of the Exchange.

The right of a member is to trade at the Exchange in New York, and not elsewhere, in securities listed on the Exchange. Admissions to membership are made on the vote of the committee on admissions. Membership may be transferred on the approval of the transfer by the committee. On the death of a member his seat is sold and the net proceeds of the sale, after payment of claims of members, are paid to his estate. When one has become a member of the New York Stock Exchange, he has a contractual right to have the association conducted in accordance with its rules and regulations.

All of these things are essential incidents of property. The restrictions which the mutual agreements of the membership place upon the use and the ownership may possibly decrease its market value. On the other hand, these very restrictions may increase its value. They do not affect its status as property any more than restrictions on the lots in a subdivision of real estate.

In Rogers v. Hennepin County, 240 U. S. 184, 60 L. ed. 594, 36 Sup. Ct. Rep. 265, it is held that memberships in exchanges, such as involved in this case, are property, notwithstanding restrictions upon their use, and nothing in the Federal Constitution prevents their being taxed; that whether such memberships are taxable under state statutes is a matter of local law; that the memberships are distinct from the assets of the corporation, and taxing members on their membership and the corporation on its assets does not amount to double taxation.

In the case we have here the membership is personal property,

of the realty corporation in New York city, and that the privilege is to do business in the building there, does not give the membership the quality or character of real property. The shares of stock in a realty company are personalty. The things that the company owns, whether real or personal, do not affect the character of the shares of stock in the company. Where is the situs of the property or membership owned by the member?

It is well settled that a state has no power to tax personal property permanently situated in another state. Southern P. Co. v. Kentucky, 222 U. S. 63, 74, 56 L. ed. 96, 100, 32 Sup. Ct. Rep. 13.

As we have seen, the rights of a member are contractual. There are mutual covenants and agreements between the Exchange and the members, as well as the obligations assumed by the members toward each other. These contractual rights are enforceable, like other contract rights. They are choses in action.

A state has power to tax intangible property, choses in action, at the domicil of the owner, and such domicil is the situs of that class of personal property. 1 Cooley, Taxn. 3d ed. 89; Southern P. Co. v. Kentucky, supra, 222 U. S. 63, 76; and Union Refrigerator Transit Co. v. Kentucky, 199 U. S. 194, 50 L. ed. 150, 26 Sup. Ct. Rep. 36, 4 Ann. Cas. 493.

In the recent case of Fidelity & C. Trust Co. v. Louisville, 245 U. S. 54, 62 L. ed. 145, L.R.A.1918C, 124, 38 Sup. Ct. Rep. 40, Ann. Cas. 1918C, 1201, it was held that liability to taxation in one state does not necessarily exclude liability in another.

Now, in this case, the right secured to a member to go to the Stock Exchange in New York and there conduct his business in stocks in the manner prescribed is doubtless the most valuable right of

membership. But as incident to his membership he is also granted the right to deal with and through other members, on certain fixed percentages and methods of division of commissions. This right to secure the services of other members at a lower rate, and to split commissions, is a very valuable right. By it the plaintiff in Cincinnati is enabled to properly hold himself out to the world as a member, entitled to all the privileges and able to secure all of the advantages, of the New York Stock Exchange. All of which advantages are denied to nonmembers. He is thus enabled to conduct from and in his Cincinnati office a large business through other members in New York. All of which is regularly and properly done. The situs of the valuable contractual property right of plaintiff is at the domicil of plaintiff in Cincin

-taxation at domicil of owner.

nati, and the state of Ohio has the right to tax it here.

In deciding that shares of stock constitute property, different from the capital or property of the company, Judge Spear, in Lee v. Sturges, 46 Ohio St. 153, says at page 161, 2 L.R.A. 556, 19 N. E. 564: "The capital or property of the company may be largely real estate, while the shares are, in their nature, personalty. They can have no locality, and must therefore, of necessity, follow the person of the owner, unless other provision is made by statute. The corporation is the legal owner of all the property of the company, real and personal, and within the powers conferred upon it by its charter, and for the purposes for which it was created, can deal with the corporate property as absolutely as a private individual can deal with his own. . . . The shares of stock may be worth much more than the property of the corporation; that is, the franchise may be very valuable, while the visible capital may be of but little value."

The Constitution (§ 2, art. 12) enjoins the legislature to enact laws taxing by a uniform rule all proper

ty at its true value in money, with right to exempt certain property. It is well determined that this section is a limitation on the general power to tax conferred by the 1st section of article 2 of the Constitution, and, unless tax laws have been enacted which include the property here in question, it is not taxed. It is, of course, conceded that taxing statutes are to be construed strictly in favor of the citizen and against the taxing authority.

Section 5328, General Code, reads as follows: "All real or personal property in this state, 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 property as may be expressly exempted therefrom. Such property, moneys, credits, and investments shall be entered on the list of taxable property as prescribed in this title."

Section 5325, General Code, contains the following: "The term 'personal property' as so used, includes first, every tangible thing being the subject of ownership, whether animate or inanimate, other than money, and not forming part of a parcel of real property, as hereinbefore defined; second, the capital stock, undivided profits, and all other means not forming part of the capital stock of every company, whether incorporated or unincorporated, and every, share, portion, or interest in such stocks."

In Lee v. Sturges, supra, it is said (46 Ohio St. at page 159): "For every presumption is in favor of that construction of the law which gives effect to the requirement of the section of the Constitution referred to, and we are forced to the conclusion that the general assembly in enacting this law intended, so far as the complex nature of human business affairs should make it practicable, to include within the taxing provisions all property within the state, and not to exceed in its exemptions the limit prescribed, as

is

to persons, of 'personal property not exceeding in value $200 for each individual.' And, further, that where an exception or exemption claimed, the intention of the general assembly to except must be expressed in clear and unambiguous terms. "The exemption must be shown indubitably to exist. At the outset every presumption is against it. A well-founded doubt is fatal to the claim. It is only where the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be supported.' West Wisconsin R. Co. v. Trempealeau County, 93 U. S. 595, 23 L. ed. 814; Tucker v. Ferguson, 22 Wall. 527, 22 L. ed. 805. Intent to confer immunity from taxation must be clear beyond a reasonable doubt; for, as in case of a claim of grant, nothing can be taken against the state by presumption or inference."

The provisions of § 5328, General Code, are comprehensive and provide for the taxa

taxation.

-statutory authority for tion of all real or personal property, and that includes the property here in question.

Section 5325, General Code, does not exclude any property or thing from the term "personal property,"

but out of abundant caution provides that the term shall include the things named. It cannot be construed as if it read "the term shall only include."

As pointed out in Ohio Electric R. Co. v. Ottawa, 85 Ohio St. 229, 236, 97 N. E. 835, the maxim, "expressio unius exclusio alterius," is to be applied only as an aid to discover intention, and not to defeat clear intention.

In view of the plain provision of the Constitution enjoining the taxation of all property, real and personal, of the equally plain provision of § 5328, General Code, passed in obedience to that constitutional injunction, there can be no doubt that when it is once determined that the membership in question is personal property, and that its situs is the domicil of the plaintiff in Hamilton county, it is taxable there.

Judgment affirmed.

Jones, Matthias, Johnson, Wanamaker, and Robinson, JJ., concur. Donahue, J., not participating. Petition for rehearing denied. Affirmed by the Supreme Court of the United States, November 7, 1921 (U. S. Adv. Ops. 1921–22, p. 18) – U. S. 66 L. ed. Sup. Ct. Rep. 46.

Although in several instances the question has arisen as to where membership in a stock exchange or board of trade is taxable, no other case has been found discussing the precise point involved in the reported case (ANDERSON v. DURR, ante, 82), and the same case in the United States Supreme Court (U. S. Adv. Ops. 1921-22, p. 18) - U. S., 66 L. ed., 42 Sup. Ct. Rep. 46. The holding therein was to the effect that a resident of Ohio may be taxed on a membership or "seat" which he holds in the New York Stock Exchange. The state court adopts the view that such membership is a valuable property right

42

having a market value, and as such is intangible personal property, taxable at the domicil of the owner; saying that, although the restrictions which the mutual agreements of the membership placed on the use and ownership might decrease its market value, they would not affect its status as property. The decision of the state court was affirmed by the United States Supreme Court on a writ of certiorari. The latter court, of course, accepted the decision of the state supreme court that the seat in the New York Stock Exchange had been subjected to taxation by the Ohio statute, assuming the constitution

ality of the statute. In answering the contention that the statute was contrary to due process of law, on the theory that the privilege of membership in the Exchange was so inseparably connected with specific real estate in New York that its taxable situs must be regarded as not within the jurisdiction of the state of Ohio, the court said: "It is very clear, however, as the supreme court held, that the valuable privilege of such membership is not confined to the real estate of the Stock Exchange; that a member has a contractual right to have the association conducted in accordance with its rules and regulations, and, incidentally, has the right to deal through other members on certain fixed percentages and methods of division of commissions; that this right to secure the services of other members and to 'split commissions' is a valuable right, by which plaintiff in Cincinnati may properly hold himself out as a member entitled to the privileges of the Exchange, denied to nonmembers; and that thus he is enabled to conduct from and in his Cincinnati office a lucrative business through other members in New York. The court held, and was warranted in holding, that the membership is personal property, and, being without fixed situs, has a taxable situs at the domicil of the owner, mobilia sequuntur personam. Nor is plaintiff's case stronger if we assume that the membership privileges, exercisable locally in New York, enable that state to tax them even as against a resident of Ohio. See Rogers v. Hennepin County (1916) 240 U. S. 184, 191, 60 L. ed. 594, 599, 36 Sup. Ct. Rep. 265. Exemption from double taxation by one and the same state is not guaranteed by the 14th Amendment (St Louis Southwestern R. Co. v. Arkansas (1914) 235 U. S. 350, 368, 59 L. ed. 265, 273, 35 Sup. Ct. Rep. 99); much less is taxation by two states, upon identical or closely related property interests falling within the jurisdiction of both, forbidden (Kidd v. Alabama (1903) 188 U. S. 730, 732, 47 L. ed. 669, 672, 23 Sup. Ct. Rep. 401; Hawley v. Malden (1914)

232 U. S. 1, 13, 58 L. ed. 477, 483, 34 Sup. Ct. Rep. 201, Ann. Cas. 1916C, 842; Fidelity & C. Trust Co. V. Louisville (1917) 245 U. S. 54, 58, 62 L. ed. 145, 148, L.R.A.1918C, 124, 38 Sup. Ct. Rep. 40)." In overruling the contention that the plaintiff was denied the equal protection of the laws within the 14th Amendment upon the theory that brokers in the same city are not taxed upon the value of their memberships in the local stock exchange, nor upon the privilege of doing business in New York Stock Exchange securities, the court said: "As to the local exchange memberships, it may be that the failure to tax them is but accidental, or due to some negligence of subordinate officers, and is not properly to be regarded as the act of the state. If it be state action, there is a presumption that some fair reason exists to support the exemption, not applicable to a membership in the New York Exchange, and plaintiff has shown nothing to overcome the presumption as to the privilege referred to, it already has been shown that the rights incident to plaintiff's property interest give him pecuniary advantages over others in the same business. Manifestly this furnishes a reasonable ground for taxing him upon the property right, although others enjoying lesser privileges, because of not having it, may remain untaxed." The contention that the tax constitutes a direct burden upon interstate commerce was dismissed as groundless, with the observation that ordinary property taxation imposed upon property employed in interstate commerce does not amount to an unconstitutional burden upon the commerce itself. whose Holmes, J., doubts as to the correctness of the views of the majority were shared by Van Devanter and McReynolds, JJ., said that if left to himself he would have thought that the foundation and substance of plaintiff's right was the right of himself and his associates personally to enter the New York Stock Exchange building and to do business there; that all the rest was incidental to that, and that, on its face, was localized in New York, and, if so,