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and others, who have done nothing in violation of the law itself, are to be held innocent, I do not presume to decide. Such distinction is, nevertheless, made by our law, and in sentiment such discrimination certainly exists. Just objection may therefore be made by the friends and relatives of the unfortunates committed, without a taint of crime, to our State hospitals, if the latter are compelled to there live in confined association, or in the same institution, with those who are looked upon as criminals, but against whom the sentence of the law is stayed. I am advised that no provision is made at Bridgewater for the confinement of female prisoners committed as criminally insane. It appears that such provision should be made.

ANNUAL EXAMINATION OF BONDS FOR THE FAITHFUL PER

FORMANCE OF DUTY IN THE CUSTODY OF THE TREAS

URER AND RECEIVER-GENERAL. Section 16 of chapter 18 of the Revised Laws requires courts and public officers or boards, whose duty it is to approve bonds for the faithful performance of official duties or trusts which are in the custody of the Treasurer and ReceiverGeneral, annually to examine into the sufficiency of such bonds, and report thereon to the Governor and Council.

Such examination, if made in the manner prescribed and with the care and detail requisite to insure the protection of the public interests which such bonds are designed to afford, must in every instance entail upon the official charged with the responsibility of making the examination exacting and sometimes protracted investigation, which, in the case of the courts, is a duty quite foreign to, and possibly inconsistent with, judicial functions, since a question of fact or law on such bond might come before such courts for their official determination.

In the case of similar and no less important bonds deposited with the Controller of County Accounts, the duty to make such examination is imposed upon that officer, or one of his deputies (section 18); and I see no reason why the bonds in the custody of the Treasurer and Receiver-General should not in like manner be examined by him, or under his authority, or by or under authority of the Auditor, and I therefore recommend legislation to accomplish that result.

THE OFFICE OF THE ATTORNEY-GENERAL. The tabulations hereinafter appearing state the number of cases pending or acted upon with which this department has been concerned. It may be a matter of interest, however, to call specific attention to the fact that during the past year actual trials have been had and an adjudication reached in forty-nine cases involving the assessment of damages for property taken by the Commonwealth, of which twelve were for property taken by the Metropolitan Park Commission, twenty-three by the Metropolitan Water and Sewerage Board, one by the Harbor and Land Commission and thirteen were for the determination of damages sustained by the restriction of the height of buildings in the vicinity of the State House. One hundred and sixty-one cases pending for the settlement of damages for property taken have been settled out of court, — fifty-five for the Metropolitan Park Commission, eighty-nine for the Metropolitan Water and Sewerage Board, fourteen for damages sustained by restriction of the height of buildings in the vicinity of the State House and three for the Harbor and Land Commission.

Annexed to this report are the principal opinions submitted during the current year.

Respectfully submitted,

HERBERT PARKER,

Allorney-General.

OPINIONS.

Taxation · Real Estate Trust Valuation of Corporate Fran

chise - Deduction of Stock and Bonds. Shares of stock in a real estate trust, so called, which represent the rights

of the beneficiaries in real estate, under a declaration of trust providing that no right, title or interest in such real estate shall vest in the shareholders, are personal property, and, as such, are not to be deducted by the Commissioner of Corporations in ascertaining (under the provisions of R. L., c. 14, § 38) the valuation of the corporate franchise of a corporation owning such shares, for the purpose of

taxation. With the bonds of such trust, however, which are secured by real estate

owned by the trustees, it is otherwise, and the value of such bonds may be deducted from the aggregate value of the shares of the corporation in determining the taxable value of the franchise.

Jan. 6, 1903. Hon. WILLIAM D. T. TREFRY, Tax Commissioner.

DEAR SIR: In your letter of November 3 you ask whether, in ascertaining the value of a corporate franchise for the purposes of taxation, you are required, under R. L., c. 14, § 38, to deduct as 6 real estate subject to local taxation ” stocks and bonds of certain real estate trusts, so called.

The stocks are shares representing the rights of beneficiaries in real estate, under certain declarations of trust which provide that no title, interest or estate in any land is to vest in the shareholders, and that the shares are to be and remain as to title personal property only. The bonds are mortgage bonds, secured by real estate owned by such trustees. The trustees have paid local taxes on all the real estate, assessed by the local authorities as of May 1, 1902.

As to both stocks and bonds, it is obvious that, unless they are deducted from the value of the corporate franchise, double taxation will result. Though not taxable to individuals owning them, if they are allowed to enter into the estimated market value of the capital stock of the corporation which owns them, they will be taxed indirectly, while the real estate which makes them valuable has already paid a tax. If the spirit of forbidding double taxation were perfectly carried out in the law, these interests would be deducted, but there are numerous instances where the spirit has failed. The Legislature has not provided that a corporation may deduct from the value of its franchise all property elsewhere taxed, or upon which an unincorporated owner would not be required to pay a tax. For example, if a corporation owns stock in another domestic corporation, this may not be deducted from the value of the former corporation, though to an individual owner it would not be taxable. The Legislature has provided merely for deduction of real estate and machinery upon which a local tax has been paid. Therefore, unless these stocks and bonds are real estate, you are not authorized to deduct them.

First, as to the shares of stock. It may be suggested that, since the trust is not a corporation, the shareholders have the whole equitable estate in the land, subject to certain restrictions contained in the trust agreement, in spite of the provision that their interest shall be only personal, this provision being ineffectual until the property is actually converted into personalty. Such a contention was made in Howe v. Morse, 174 Mass. 491, but the court found it unnecessary to pass upon it. If this is sound, then it may be that the corporation owning an equitable interest in real estate, subject to local taxation to the trustees, should deduct its value.

But while there is no authority upon either side of the question, in my opinion the interest of a shareholder is personal property. One hundred years ago the question was much discussed whether stock in corporations, whose property consisted exclusively of real estate, was not an interest in realty. While a few States held it to be realty until the doctrine was corrected by legislation (see Welles v. Cowles, 2 Conn. 567 ; Copeland v. Copeland, 7 Bush, 349), the English and most of the American decisions settled down upon the other view, only one of them (Johns v. Johns, 1 Ohio State, 351) basing it solely upon the ground wbich is the one point of difference between that case and the present, — that the interested parties were incorporated. See Russell v. Temple, 3 Dane Abr. 108 (Mass. 1798); Bligh v. Brent, 2 Y. & C. 268 (1837); Arnold v. Ruggles, 1 R. I. 165 (1837). See In Re Jones' Estate, 172 N. Y. 575.

These leading decisions mention as one ground that the real estate is owned not by the members, but by the corporation, which is a distinct entity; and base their conclusion also upon the ground, which applies as well to the present situation, that the test must be not the nature of the property out of which the dividends come, but the nature of the rights which ownership of the stock carries. These rights are strictly personal in both cases. The fact that the property is owned by a real instead of an artificial person is not, in

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