People ex rel. Edward & John Burke v. Wells

• Decision Date: 13 March 1906
• Citation: 77 N.E. 19,184 N.Y. 275
• Court: New York Court of Appeals Court of Appeals
• Parties: PEOPLE ex rel. EDWARD & JOHN BURKE, Limited, v. WELLS et al., Tax Com're.

184 N.Y. 275

77 N.E. 19

PEOPLE ex rel. EDWARD & JOHN BURKE, Limited,

v.WELLS et al., Tax Com're.

Court of Appeals of New York.

March 13, 1906.

Appeal from Supreme Court, Appellate Division, First Department.

Application by the people, on the relation of Edward & John Burke, Limited, for writ of certiorari against James L. Wells and others, commissioners of taxes and assessments of the city of New York, to review an assessment. From an order of the Appellate Division (95 N. Y. Supp. 100,107 App. Div. 15), affirming an order of the Special Term dismissing the writ, plaintiff appeals. Affirmed.

O'Brien, J., dissenting.

Edmund Wetmore, for appellant.

John J. Delany, Corp. Counsel (George S. Coleman and Curtis A. Peters, of counsel), for respondents.

CULLEN, C. J.

The relator is a foreign corporation engaged at Dublin, Ireland, in the manufacture of spirituous and malt liquors. It has established and maintains an office in the city of New York for the sale of its products, which are imported into this country and sold in the original packages. The relator made application under the statute for permission to carry on business in this state, and was granted such permission. In January, 1903, it was assessed for personal property in this state at the sum of $94,617.93, for three separate items-the value of its office furniture, $797.68; cash on hand and in bank, $6,122.63; and the remainder for bills receivable held in the city of New York.

The relator contends that so far as the last two items are concerned they do not represent capital employed in this state within the meaning of our tax law, and further that as they are the proceeds of sales in original packages they are not subject to taxation by the state. The first contention we will not discuss, as we deem the question settled by the recent decision of this court in People ex rel. Farcy & Oppenheim Co. v. Wells, 183 N. Y. 264, 76 N. E. 24. As the point presented by the relator's second claim was not involved or, at least, not raised in the case cited, we will briefly consider it.

It is well settled that while imported goods are in the hands of the importer in the original packages they are not subject to taxation by the state, nor can any tax be imposed upon their sale by way of a license tax or percentage on the price for which they may be sold. But though no tax can be imposed either on the goods themselves or their sale, we find no authority for the proposition that the proceeds of the sales have a similar immunity from taxation. Doubtless, if the tax were imposed on those proceeds as such, and because they were derived from the sales of imported goods, it would be invalid; but, if the proceeds have become part of the common mass of the property within a state, they are subject to taxation, of course, without discrimination the same as other property. In Hibernia Savings & Loan Association v. City and County of San Francisco (decided Jan. 29, 1906) 26 Sup. Ct. 265, 50 L. Ed.-, the Supreme Court of the United States held that two checks on the United States treasury received by the appellant as interest upon certain registered government bonds held by it were taxable, though the bonds themselves were exempt from taxation. Justice Brewer there said: ‘Had the plaintiff drawn the money immediately upon these checks it would have become at once a part of the general property of the bank, and the fact that the money had been derived from the United States and paid to the bank as interest on its obligations would not have prevented its becoming part of the general property of the bank, and subject to state taxation.’ The real question in this case, therefore, is whether the property on which the relator has been taxed, though belonging to a nonresident, had acquired such a situs within this state as to be subject to taxation-a question that does not depend on the source from which the property was derived. We assume that, if a nonresident sold within this state property which under the federal Constitution was immune from taxation, such as imported goods in the original packages or government bonds, and forthwith transmitted the proceeds of the sale without the state, the proceeds would not be subject to local taxation simply because in the course of transmission they happened to be physically within the state on assessment or listing day; at least, the Legislature has never attempted to subject such money or property to taxation. The question seems to us to be substantially the same as that which has been several times presented as to the right of the state to tax property in course of transportation through its limits to other states, for we see no difference in principle in this respect between foreign and interstate commerce. ‘The law on this subject, so far as it concerns interference with interstate commerce, is settled by several cases in ...