Am. Pig—iron Storage Co. v. State Bd. of Assessors

• Decision Date: 02 April 1894
• Citation: 29 A. 160,56 N.J.L. 389
• Parties: AMERICAN PIG—IRON STORAGE CO. v. STATE BOARD OF ASSESSORS.
• Court: New Jersey Supreme Court

29 A. 160

56 N.J.L. 389

AMERICAN PIG—IRON STORAGE CO.

v. STATE BOARD OF ASSESSORS.

Supreme Court of New Jersey.

April 2, 1894.

(Syllabus by the Court.)

Certiorari by the American Pigiron Storage Company against the state board of assessors to review an assessment Assessment affirmed.

Argued November term, 1893, before DEPUE, VAN SYCKEL, and REED, JJ.

Allan McDermott, for prosecutor. William Y. Johnson, for defendant.

DEPUE, J. By section 4 of the act to provide for the imposition of state taxes upon certain corporations, etc., approved April 18, 1884, after enumerating certain corporations, and providing the method of taxing those corporations, it was enacted "that all other corporations incorporated under the laws of this state and not hereinbefore provided for shall pay a yearly license fee or tax of one-tenth of one per centum on the amount of the capital stock of such corporations." Supp. Revision, p. 1017. This section was amended and re-enacted by an act passed March 16, 1891 (P. L. 1891, p. 151), and again by an act passed March 17, 1892 (P. L. 1892, p. 139). In the act of 1892 the part of the act of 1884 above quoted was amended to read as follows: "All other corporations incorporated under the laws of this state * * * shall pay an annual license fee or franchise tax of one-tenth of one per centum on all amounts of capital stock issued and outstanding up to and including the sum of three million dollars; on all sums of capital stock issued and outstanding in excess of three million dollars and not exceeding five million dollars, an annual license fee or franchise tax of one-twentieth of one per centum, and the further sum of fifty dollars per annum per one million dollars, or any part thereof, on all amounts of capital stock issued and outstanding in excess of five million dollars." The prosecutor is a corporation taxable under the clause of the act of 1892 above quoted. The tax assessed was for the year 1893. It was assessed by the state board of assessors upon a capital of $1,500,000. The contention of the prosecutor is that) this assessment was illegally made. The controversy has arisen out of the substitution in the act of 1892 of the words "capital stock issued and outstanding" for the words "capital stock" in the act of 1884. The prosecutor was incorporated pursuant to the tenth and eleventh sections of the general corporation act (Revision, p. 179). Section 11 of that act provides the method of incorporating by a certificate which shall set out among other things, the total amount of the capital stock of such company, the number of shares into which the same is divided, and the par value of each share, and the names and residences of the stockholders, and the number of shares held by each. This certificate is required to be recorded in the office of the county clerk, and filed in the office of the secretary of state. Upon recording and filing of the certificate the persons so associating, etc., become incorporated. Revision, p. 180, § 13.

The certificate by which this company was organized was in conformity with the statute. It set out that the total amount of the capital stock of said company is to be $1,500,000, divided into 15,000 shares, of the par value of $100 each; and the amount of the capital stock with which said company shall commence business is $1,300,000, divided into 13,000 shares, of the par value of $100 each. The names and residences of the stockholders, and the number of shares held by each are as follows, to wit (giving the names of stockholders, 22 in number, the residence of each, and the number of shares held by each, aggregating 13,000 shares). The proof in the case is that stock to the amount of $1,500,000 was subscribed for. Upon the stock so subscribed for, two assessments of 5 per cent each, amounting to $150,000, have been made, and were paid by the subscribers. The contention is that capital stock subscribed for is not "capital stock issued and outstanding," within the meaning of the act of 1892. This contention is founded upon the fact that the subscriptions to the capital stock have not been fully paid up, and that no certificates of stock have been given to the subscribers. The certificate of incorporation was recorded in the Hudson county clerk's office November 28, 1888, and in the office of the secretary of state on the same day. The company was organized by the election of officers the latter part of the same month, and commenced business in May, 1889, and is still conducting its business. The general corporation act under which this company was organized, treats the persons named in the certificate as the stockholders who hold the shares of the company's capital stock; and, throughout the act, persons who have become subscribers for stock are regarded as stockholders. By section 38 the managers and directors are to be elected by the stockholders, and each stockholder is, at such election, entitled to vote for each share of stock held by him. By section 47 no one is eligible to the office of director unless he be a bona fide holder of stock. The books of the corporation are made conclusive evidence of the right of a person to vote as a stockholder, and are prima facie evidence of the qualifications for the office of director. In re St Lawrence Steamboat Co., 44 N. J. Law, 530. Nowhere in the act is there the faintest indication that payment in full of the par value of the stock subscribed for is a condition precedent to the status of a...