People ex rel. Brush Elec. Illuminating Co. v. Wemple

• Decision Date: 20 January 1892
• Citation: 129 N.Y. 543,29 N.E. 808
• Parties: PEOPLE ex rel. BRUSH ELECTRIC ILLUMINATING CO. v. WEMPLE, Comptroller.
• Court: New York Court of Appeals Court of Appeals

129 N.Y. 543

29 N.E. 808

PEOPLE ex rel. BRUSH ELECTRIC ILLUMINATING CO.

v.WEMPLE, Comptroller.

Court of Appeals of New York.

Jan. 20, 1892.

Appeal from supreme court, general term, third department.

Certiorari at the relation of the Brush Electric Illuminating Company against Edward Wemple, comptroller of the state of New York. From a judgment for defendant, relator appeals. Reversed.

John W. Houston, for appellant.

Chas F. Tabor, Atty. Gen., for respondent.

O'BRIEN, J.

This appeal brings here for review a judgment entered upon the return to a writ of certiorari, sued out by the relator, for the purpose of review in a decision or determination of the defendant as comptroller of the state, whereby the relator was adjudged liable to pay certain taxes and penalties to the state under chapter 361 of the Laws of 1881 and the laws supplementary thereto and amendatory thereof, providing for the assessment and payment of taxes to the state by certain corporations. The relator is a domestic corporation, organized by filing a certificate February 17, 1881, under the act of 1848, providing for the formation of corporations for manufacturing and other purposes. Since its organization it has been engaged in the business of producing electricity, and supplying the same to its customers in the city of New York for the purpose of lighting public and private places in that city. The relator contended that it was a manufacturing corporation, and as such exempt from paying the tax to the state upon its business, and made no reports and paid no taxes till July, 1889, and then only by force of chapter 353 of the Laws of 1889, which took electric light companies, by name, out of the exemption clause in favor of manufacturing corporations. The relator is beyond all controversy liable for the tax since the passage of the act last mentioned, but denies that it is liable for anything before, as the exemption clause covering manufacturing corporations then applied to it. In the year 1889, the comptroller caused an examination of the affairs of the relator to be made by a commissioner appointed by him, and upon his report made a statement of the account between the relator and the state, and determined the amount of the tax and penalty due to the state at $10,752.50. The comptroller then issued his warrant to the sheriff, under the statute, directing the collection of the tax out of the relator's property, and it was thus compelled to pay, in order to protect its property from sale, and it did pay under protest. By chapter 463 of the Laws of 1889 power is given to the comptroller at any time to revise and readjust any account for taxes settled against any corporation by him or any of his predecessors in office for taxes arising under the statute, when it is made to appear by evidence submitted to him that the same has been illegally paid, or when it includes taxes that could not have been lawfully demanded; and he was required to resettle the account according to law and the facts, and to charge or credit, as the case might be, the difference, if any, resulting from such revision and resettlement, upon the current account of such corporation. The relator, claiming the benefits of this statute, filed with the comptroller, August 4, 1890, an application in writing in the form of a petition for a revision and readjustment of the taxes previously levied and paid. This application was verified, and accompanied by proofs to show that the relator was a manufacturing corporation, and for that reason the taxes paid by it could not have been lawfully demanded by the state. The comptroller denied this application, and from his order, refusing the revision asked for, the relatorsought relief before the court by means of the writ of certiorari. The relator did not complain of the amount determined by the comptroller, and the only question which was the subject of controversy on the application for a revision was whether the relator was or was not exempt from payment of taxes as a manufacturing corporation.

A question of practice is presented by a point made by the attorney general to the effect that the relator was not entitled to the writ of certiorari in this case, which renders it necessary to notice the various statutory provisions prescribing the methods of reviewing the determination of the comptroller in these cases. The account against the relator, which established the assessment, so far as it was within the power of the comptroller to do so, was settled July 3, 1889. Immediate notice of the assessment was given to the relator, and, after the expiration of 30 days, no proceedings having been taken to review the same under section 17 of the act of 1881, as amended by chapter 501 of the Laws of 1885, the comptroller issued his warrant for the collection, of the tax. The learned attorney general contends that the relator, by delay, lost the right of review by certiorari. This would probably be so except for subsequent legislation, which must be presently noticed. The Code (section 2122) provides that, except as otherwise prescribed by statute, a writ of certiorari cannot be issued to review any determination which can be adequately reviewed by an appeal to a court, or to some other body or officer; and it is urged by the attorney general that the relator could have appealed from the determination of the comptroller to a board composed of the secretary of state, attorney general, and state treasurer under the last clauses of section 1 of the act of 1881, and for that reason was not entitled to the writ. The provision for an appeal to this board does not seem to apply to a case like this, where the officers of the corporation, taking the position that the company was not subject to any taxation whatever under the act, neglect or refuse to make any report, but to cases where reports are made by the proper officers of the corporation, and the comptroller, not being satisfied with such report, proceeds to make a valuation of his own, and to settle an account against the company upon the basis of such valuation. Then the company may appeal to the board above mentioned, and the question presented by the appeal would seem to be whether the valuation made by the corporate officers, or by the comptroller in disregard of it, is the correct and just one. Here the valuation and determination were not made under section 1, but under section 12, of the act of 1881, as amended by chapter 151 of the Laws of 1882, and chapter 501 of the Laws of 1885. But the act of 1889, above referred to, which gives to the relator the right to apply for a revision and resettlement of the tax, also prescribes a method for reviewing the action of the comptroller upon such application, which brings up all questions involved in the application. The act provides that ‘the action of the comptroller upon any application made to him by any person or corporation for a revision and a settlement of accounts, as provided in this act, may be reviewed, both upon the law and the facts, upon certiorari by the supreme court at the instance either of the party making such application, or of the attorney general in the name and in behalf of the people of this state, and for that purpose the comptroller shall return to such certiorari the accounts and all the evidence submitted to him on such application; and, if the original or resettled accounts shall be found erroneous or illegal by that court, either in point of law or of fact, the said accounts shall be there corrected and restated by the said supreme court, and from any such determination of the supreme court an appeal may be taken by either party to the court of appeals, as in other cases.’ Whatever may be said against the policy of requiring the comptroller to revise and change accounts for taxes, years after the settlement of such accounts, and perhaps after the payment of the tax, this statute is broad enough in its language, and was, we think, intended to reach such a case as this.

The right of the state to receive the tax assessed upon the relator depends upon the question whether it was or was not a manufacturing corporation. In the original act providing for the payment of taxes to the state by certain corporations, ‘manufacturing corporations carrying on manufactures within this state’ were exempted from its operation. Laws 1880, c. 542, § 3. In the practical operation of the law it was soon discovered that these broad, general words of exemption covered and protected from the payment of the tax a class of corporations which the legislature probably did not intend to relieve when inserting the words of exemption in the statute. Accordingly it was found necessary from time to time, as the cases arose, to take out of this general exemption certain corporations by name which the legislature thought were not within its policy. The courts held that gas companies were manufacturing companies, (Gas-Light Co. v. City of Brooklyn, 89 N. Y. 469,) and the legislature, in 1881, proceeded to amend the law by providing that gas companies should not be taken to be within the exemption. So electric lighting and power companies were taken out of the exemption by the use of similar language. Laws 1889, c. 353. These amendments, it is contended in behalf of the relator, show a construction by the legislature of the term ‘manufacturing corporations' in harmony with its claims in this case. In so far as the action of the...