People ex rel. Cornell Steamboat Co. v. Dederick

• Decision Date: 09 January 1900
• Citation: 161 N.Y. 195,55 N.E. 927
• Parties: PEOPLE ex rel. CORNELL STEAMBOAT CO. v. DEDERICK, Assessor.
• Court: New York Court of Appeals Court of Appeals

161 N.Y. 195

55 N.E. 927

PEOPLE ex rel. CORNELL STEAMBOAT CO.

v.DEDERICK, Assessor.

Court of Appeals of New York.

Jan. 9, 1900.

Appeal from supreme court, appellate division, Third department.

Proceeding by the people, on the relation of the Cornell Steamboat Company, against Addison E. Dederick, assessor. From an order of the appellate division (58 N. Y. Supp. 1146) affirming an order of the special term (55 N. Y. Supp. 40) striking a certain sum for relator's personal property from the assessment roll, defendant appeals. Order modified.

John W. Searing, for appellant.

Charles A. Collin and Amos Van Etten, for the People.

HAIGHT, J.

The Cornell Steamboat Company is a domestic corporation engaged in the business of towing vessels upon the Hudson river and adjacent navigable waters, and having its office in the city of Kingston. In the year 1898 the assessor for that city assessed the relator for personal property the sum of $250,000, in addition to its real estate. Written objections to the assessment for personal property were filed with the assessor by the relator, together with a statement of the property and assets of the company. Subsequently the testimonyof the president of the company was taken by the assessor, from which it appeared that the value of the relator's property was as follows:

+-----------------------------------------------+
                ¦Steamboats             ¦           ¦$550,000 00¦
                +-----------------------+-----------+-----------¦
                ¦Real estate            ¦           ¦149,200 00 ¦
                +-----------------------+-----------+-----------¦
                ¦Amount due from persons¦           ¦131,721 44 ¦
                +-----------------------+-----------+-----------¦
                ¦Cash on hand           ¦           ¦18,193 87  ¦
                +-----------------------+-----------+-----------¦
                ¦Materials and supplies ¦           ¦11,637 83  ¦
                +-----------------------+-----------+-----------¦
                ¦Machinery and tools    ¦           ¦30,000 00  ¦
                +-----------------------+-----------+-----------¦
                ¦Total                  ¦           ¦$890,753 14¦
                +-----------------------+-----------+-----------¦
                ¦Deduct amount due      ¦           ¦           ¦
                +-----------------------+-----------+-----------¦
                ¦others                 ¦$ 96,301 37¦           ¦
                +-----------------------+-----------+-----------¦
                ¦Mortgage indebtedness  ¦700,000 00 ¦           ¦
                +-----------------------+-----------+-----------¦
                ¦Real estate            ¦149,200 00 ¦           ¦
                +-----------------------+-----------+-----------¦
                ¦                       ¦           ¦945,501 37 ¦
                +-----------------------+-----------+-----------¦
                ¦Leaving a deficiency of¦           ¦$ 54,748 23¦
                +-----------------------------------------------+
                

It also appeared that the capital stock of the corporation was $750,000, and that out of the earning of the company a dividend has been paid annually of 6 per cent. upon its capital stock, together with the interest upon its bonded indebtedness. It also appeared that in 1893 the relator purchased the boats, franchise, and business of another company, for which it paid $30,000, and at that time increased its mortgage indebtedness from $400,000 to $700,000. With reference to this transaction the president of the company testified that he regarded the franchise and business purchased worth more than the boats; that he did not regard the franchise given to a steamboat company by the state of any value whatever except as a form under which to do business; that it did not convey any exclusive privileges, as in the case of a railroad, but simply admits an organization by which people can join together and do business under a state law; and in stating the value of the franchise purchased he wished it to be understood that he regarded it as depending solely on the god will of the business concern purchased. It is now contended, on behalf of the assessor, that in making the assessment for personal property he had the right to assume, from the fact that the company paid a dividend annually of 6 per cent., that its capital stock remained unimpaired. It must be conceded that the assessor had the right to avail himself of such assumption in determining the amount which should be assessed for personal property. This right has been distinctly recognized in the cases of People ex rel. Equitable Gaslight Co. v. Barker, 144 N. Y. 94, 39 N. E. 13, and People ex rel. Manhattan Ry. Co. v. Same, 146 N. Y. 304, 40 N. E. 996. These cases arose under the old constitution, and before the power of this court to review was limited, by the provisions of the constitution, to questions of law only. If the special term and the appellate division had affirmed the assessment based upon the assumption referred to, we should have had no power to interfere unless it could have been shown that some other basis of making the assessment had been adopted which was unauthorized. The power of the supreme court to review assessments, given by section 253 of the tax law, is ample to permit a review of the facts. It may even take the testimony of witnesses, and determine the facts anew. In this case it appears that the assessor did not believe the statement of the corporation to the effect that its indebtedness was greater than the value of its personal property, and therefore made an assessment upon the assumption that the capital stock remained unimpaired. The special term differed with the assessor in this: that it did believe the statement made by the corporation that its indebtedness did exceed the value of the personal estate, and therefore struck out the assessment. The question is purely one of fact, which, under the provisions of the constitution, we have no power to review, so far as this branch of the case is concerned.

A question has arisen as to whether there is any authority in law for a deduction of the debts of a corporation in assessing its personal property for town, county, and municipal purposes. Upon this question able briefs have been submited by counsel, in which is disclosed a history of the tax laws from the beginning of the nineteenth century. We have not thought it necessary to enter upon an extended review of former statutes, for, to our minds, the answer that should be given to the question under existing laws is reasonably clear. It must be conceded that the tax law of 1896 does not, in express terms, direct the deduction of debts of corporations in assessing their personal property, but that such a deduction was intended by the legislature we have no reasonable doubt. Under prior laws they were deductible, as this court has repeatedly held. People v. Ferguson, 38 N. Y. 89;People v. Ryan, 88 N. Y. 142;People v. Asten, 100 N. Y. 597, 3 N. E. 788;People ex rel. Commonwealth Ins. Co. v. Coleman, 112 N. Y. 565, 20 N. E. 389,2 L. R. A. 772;People ex rel. Union Trust Co. v. Same, 126 N. Y. 433, 27 N. E. 818;People ex rel. Edison Electric Illuminating Co. v. Barker, 139 N. Y. 55, 34 N. E. 722;People ex rel. Second Ave. R. Co. v. Same, 141 N. Y. 196, 36 N. E. 184;People ex rel. Equitable Gaslight Co. v. Same, 144 N. Y. 94, 39 N. E. 13;People ex rel. Manhattan Ry. Co. v. Same, 146 N. Y. 304, 40 N. E. 996;People ex rel. Consolidated Telegraph & Electrical Subway Co. v. Same, 7 App. Div. 27,39 N. Y. Supp. 776, affirmed in 151 N. Y. 639, 45 N. E. 1133;People ex rel. Manhattan Ry. Co. v. Same, 152 N. Y. 417, 46 N. E. 875;People ex rel. Bridgeport Sav. Bank v. Same, 154 N. Y. 128, 47 N. E. 973;People v. Neff, 15 App. Div. 8,44 N. Y. Supp. 46, affirmed in 156 N. Y. 701, 51 N. E. 1093. Under Laws 1885, c. 411, § 4, as amended by Laws 1892, c. 202, such debts are still required to be deducted in counties having a population of upwards of 300,000 inhabitants. The fact that this statute was left unrepealed, we think, is an indication that the legislature did not intend to change the law upon the subject as it had theretofore existed; for no reason is apparent why corporations in one county should be treated with a greater liberality than those of another. This view is supplemented by the notes of the revisors, in which they state, with reference to the section of the tax law pertaining to corporations, that it is ‘without change of substance.’

Section 21 of the present tax law, prescribing the duty of assessors, provides that: ‘They shall prepare an assessment roll containing five separate columns, and shall, according to the best information in their power, set down: * * * (4) In the fourth column the full value of all the taxable personal property owned by each person respectively after deducting the just debts owing by him.’ Section 37 provides that: ‘When the assessors, or a majority of them, shall have completed their roll, they shall severally appear before any officer of their county, authorized by law to administer oaths, and shall severally make and subscribe before such officer an oath in the following form: ‘We, the undersigned, do severally depose and swear * * * that the said assessment roll contains a true statement of the aggregate amount of the taxable personal estate of each and every person named in such roll over and above the amount of debts due from such persons, respectively, and excluding such stocks as are otherwise taxable, and such other property as is exempt by law from taxation, at the full value thereof, according to our best judgment and belief.’' It will thus be seen that under section 21 we have express statutory authority for deducting the debts owing by persons in the making up of the roll, and that under section 37 we have a statutory oath prescribed, in which the assessors are required to swear that they have deducted such debts. Under the statutory construction law (section 5) ‘the term ‘person’ includes a corporation and a joint stock association.' Considering sections 21 and 37 of the tax law in connection with this provision of the statutory construction law, we are required to construe the word ‘person,’ as mentioned in those sections, as also meaning ‘corporations....