People ex rel. New York & E.R. Ferry Co. v. Roberts
Citation | 60 N.E. 1043,168 N.Y. 14 |
Parties | PEOPLE ex rel. NEW YORK & E. R. FERRY CO. v. ROBERTS, Comptroller. |
Decision Date | 10 July 1901 |
Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from supreme court, appellate division, Third department.
Certiorari by the people, on the relation of the New York & East River Ferry Company, against James A. Roberts, comptroller of the state of New York. From an order of the appellate division confirming proceedings of defendant in assessing a franchise tax against relator (55 N. Y. Supp. 1146), it appeals. Reversed.
John B. Green and Edmund L. Cole, for appellant.
John C.Davies, Atty. Gen. (Henry B. Coman, of counsel), for respondent.
The relator is a domestic corporation engaged in the operation of a ferry between Long Island City and the city of New York. The facts as to its financial condition during the year 1896, for which the tax in dispute was imposed, are as follows: Its capital stock was $750,000, issued for cash, and its bonded indebtedness amounted to a like sum. The bonds and cash were paid for the ferry property. The value of the tangible assets of the company, excluding its franchise, was $359,500, all employed within this state. The highest market price of the relator's share stock during the year was 60, and the lowest 50. The dividends paid in 1896 amounted to 4 per cent. The share stock was appraised and returned to the comptroller at 52 1/2, amounting to $393,750 for the whole capital stock. The comptroller imposed a franchise tax of 1 1/2 mills upon the par value of the relator's nominal capital stock. A writ of certiorari having been issued to review the action of the comptroller, the proceedings of that officer were confimed by an order of the appellate division of the Third department. From that order this appeal is taken.
The question before us is the proper construction of the provisions of section 182 of the tax law (Laws 1896, c. 908), so far as they relate to the case of corporations which have declared a dividend of less than 6 per cent. during the tax year. The section reads: It is contended by the learned counsel for the respondent, and has been held by the appellate division, that, under the terms of this section, every corporation which has paid a dividend of less than 6 per cent. must be assessed on the nominal or par value of its capital stock, regardless of the actual value of the stock or the amount of dividends paid. In other words, that a corporation which may have paid a dividend of 1 per cent., the market value of whose stock has not been over 25, is subject to the same franchise tax as a corporation which has paid dividends amounting to 5 per cent., and whose stock sells above par. This result is claimed to be required by the direction of the statute that ‘the tax shall be at the rate of one and one-half mills upon such portion of the capital stock at par as the amount of capital stock employed within this state bears to the entire capital of the corporation.’ It must be admitted that the phraseology of this section is confusing, and that, if it stood alone, it admits of the interpretation...
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