People ex rel. Tiffany & Co. v. Campbell

• Decision Date: 11 December 1894
• Citation: 38 N.E. 990,144 N.Y. 166
• Court: New York Court of Appeals Court of Appeals
• Parties: PEOPLE ex rel. TIFFANY & CO. v. CAMPBELL et al.

144 N.Y. 166

38 N.E. 990

PEOPLE ex rel. TIFFANY & CO.

v.CAMPBELL et al.

Court of Appeals of New York.

Dec. 11, 1894.

Appeal from supreme court, general term, Third department.

Certiorari by Tiffany & Co. against Frank Campbell, late comptroller of the state of New York, and James A. Roberts, comptroller of the state of New York, to review an assessment. From an order of the general term (30 N. Y. Supp. 70) quashing the writ, relator appeals. Affirmed.

Charles E. Miller, for appellant.

John W. Hogan, for respondents.

ANDREWS, C. J.

This appeal is from an order of the general term dismissing a writ of certiorari to review a decision of the state comptroller subjecting to taxation a portion of the relator's capital employed in this state in the years 1889, 1890, and 1891. The relator is a manufacturing corporation in this state, organized under the general law for the incorporation of manufacturing companies, for the manufacture and sale of gold and silverware and other articles of ornament and use. Its capital, stated in the certificate, is $2,400,000, which by accretion now exceeds $3,000,000. It has a store for the sale of its products in the city of New York. It employs from six to eight hundred men in its manufacturing business in this state, and about 80 per cent. of its capital. All of this capital, except a portion varying in different years from 12 to 15 per cent., is invested in its manufacturing business. The portion not employed in that way, amounting on the average to about $300,000 a year, is employed in the purchase and sale of goods, principally of foreign manufacture, of the same general character as the goods manufactured by the relator, but of a cheaper description, which it cannot itself advantageously manufacture, but which are necessary in order to make its stock complete, and to meet the wants of customers. The portion of the relator's capital not employed in this state, being about 20 per cent. thereof, is invested permanently in London and Paris, and a small part in New York.

The question presented relates to the rule of taxation as applied to the relator, and the basis upon which the tax is to be computed, assuming that to any extent the capital of the relator is taxable. The relator insists that, being a manufacturing corporation, it was exempted from taxation by section 3 of chapter 542 of the Laws of 1880, which exempted ‘manufacturing corporations carrying on manufacture within this state’; and the further claim is made in behalf of the relator that the amendment of that section by chapter 193 of the Laws of 1889, which inserted the words ‘wholly engaged in’ before the words ‘carrying on manufacture,’ contained in the act of 1880, was not intended to and did not affect or qualify the exemption given by the prior act, and that by that act a manufacturing corporation was absolutely exempt from taxation in whatever other business it might be engaged. The comptroller, in settling the tax, while expressing a doubt whether the relator's business within this state was not wholly that of manufacture within the fair meaning of the act of 1889, nevertheless concluded that it was taxable on the portion of its capital employed in this state in the purchase or sale of goods manufactured by other parties, and upon this basis adjusted the tax. The attorney general claims that the comptroller erred in limiting the tax to the portion oif the relator's capital employed in a business outside of the manufacture and sale of its own products, and that by uniting therewith the business of buying and selling other articles, although of the same general character, was not entitled to any exemption because not ‘wholly engaged’ in carrying on manufacture within the state, which, it is insisted, is the condition of exemption of manufacturing corporations imposed by the act of 1889. We do not assent to the claim of the relator's counsel that the words ‘wholly engaged in,’ contained in the amendment of 1889, do not apply to manufacturing corporations. The plain object of the exemption of manufacturing corporations carrying on manufacture within this state from taxation, by the act of 1880, was the encouragement of production, and it was assumed that the employment of capital and labor in the business of manufacture here was a just ground for the exemption. The object of the amendment of 1889 was not to withdraw the protection given by the act of 1880, but to define more specifically than in the prior act the purpose that the exemption should be confined to corporations whose corporate business was exclusively that of manufacture. Under the broad language of our statutes authorizing incorporations and the provisions of special charters, the corporate powers...