People of the State of New York Ex Rel Edward and John Burke, Limited v. James Wells

• Decision Date: 06 January 1908
• Docket Number: No. 39,39
• Citation: 52 L.Ed. 370,28 S.Ct. 193,208 U.S. 14
• Parties: PEOPLE OF THE STATE OF NEW YORK EX REL. EDWARD AND JOHN BURKE, LIMITED, Plff. in Err., v. JAMES L. WELLS, William S. Cogswell, George J. Gillespie, Samuel Strasbourger, and Rufus Scott, as Commissioners of Taxes and Assessments of the City of New York
• Court: U.S. Supreme Court

208 U.S. 14

28 S.Ct. 193

52 L.Ed. 370

PEOPLE OF THE STATE OF NEW YORK EX REL. EDWARD AND JOHN BURKE, LIMITED, Plff. in Err.,

v JAMES L. WELLS, William S. Cogswell, George J. Gillespie, Samuel Strasbourger, and Rufus Scott, as Commissioners of Taxes and Assessments of the City of New York.

No. 39.

Argued November 5 and 6, 1907.

Decided January 6, 1908.

This is a writ of error to the supreme court of the state of New York to review the judgment rendered upon a remittitur from the court of appeals of the same state, wherein an assessment of taxes against the plaintiff in error, imposed by the board of taxes and assessments of the city of New York, who are the defendants in error, was affirmed. The taxes were for the year 1903, and were imposed under the statutes of the state of New York taxing nonresidents of the state doing business in the state, on the capital invested in such business, as personal property, at the place where such business is carried on, to the same extent as if they were residents of the state. N. Y. General Tax Law, chap. 908, Laws of 1896, § 7.

The respondents, in the return to the writ of certiorari issued by the supreme court of New York, stated that the method by which the assessment for the year 1903 was arrived at was as follows:

'On the statement submitted to us (schedule A), it appeared that the relator was a corporation organized under the laws of the Kingdom of Great Britain and Ireland, that it had procured a certificate authorizing it to do business in this state, that the business of the corporation proposed to be carried on within this state, stated in its application under the provisions of chapter 687 of the Laws of 1892, was importers, that the place within the state named in said application as its principal place of business was 409 West Fourteenth street, that the company transacted business within this state at No. 409 West Fourteenth street, in the city of New York, borough of Manhattan, and that the company was assessed by the state comptroller for $124,000.

'It further appeared that the relator kept a wareroom and offices in the borough of Manhattan, to which it sent its products from Ireland in unbroken original packages to be sold, that on all these goods it paid duties to the United States, that the proceeds of the goods were at once remitted to the main office in Dublin, after reserving the necessary amount for paying the expenses of the business conducted in the city of New York, that the value of the goods on hand, as shown in the statement, was about the average amount of the goods usually kept here for sale, that the greater part of the cash on hand and in bank was in process of transmission to the main office, that the bank account was, to a very large extent, kept to cover the payment of duties on the goods shipped here for sale, and that the entire amount of bills receivable resulted from the sales of imported goods in unbroken original packages, as did the cash on hand and in bank.

                   The amount receivable on notes  
                    and open accounts was stated  
                    to be.............................. $111,751. 53
                 
                   The value of goods, wares, and  
                    merchandise in this state............ 45,841. 21
                 
                

                   The value of safes, fixtures, and  
                    furniture in this state................. 797. 6S
                 
                   Cash on hand and in bank............... 6,122. 63
                 
                   Cost price of imported goods on  
                    hand in unbroken original  
                    packages............................. 45,841. 21
                 
                   Amount of bills and accounts  
                    payable, incurred for items  
                    included in the sales and  
                    assets enumerated.................... 24,053. 91
                 

"It was admitted that the amount invested in business in this state was $797.68, which was the value of the relator's safes, fixtures, and furniture in this state.

'From all this evidence we determined that the relator had, on the second Monday of January, 1903, established and was conducting a permanent and continuous business in this state.

'We further determined that the amount receivable on notes and open accounts, and the cash on hand and in bank, constituted capital of the relator invested in its business in this state, and that such items were properly assessable by us. We accordingly fixed the assessment against the relator for the year 1903 for capital invested in business in this state at the sum of $94,600, which amount was approximately the aggregate value of the amount receivable on notes and open accounts, the safes, fixtures, and furniture in this state, and the cash on hand and in bank, less the amount of bills and accounts payable incurred for the items included in the sales and assets enumerated in said statement.'

The assessment was confirmed when brought for review upon certiorari before the New York supreme court, which judgment was affirmed in the appellate division, and the latter judgment was affirmed by the court of appeals (184 N. Y. 275, 77 N. E. 19), from which judgment, upon remittitur, the judgment was rendered in the supreme court, to which this writ of error is prosecuted.

Mr. Edmund Wetmore for plaintiff in error.

[Argument of Counsel from pages 16-18 intentionally omitted] Messrs. George S. Coleman and Francis K. Pendleton for defendants in error.

Mr. Justice Day delivered the opinion of the court:

It is the contention of the plaintiff in error that the assessment upon $94,617.93, made upon office furniture, cash on hand and in bank, and the amount receivable upon bills and accounts payable, is void, except as to the item of office furniture, because of the protection afforded by the Constitution of the United States against taxes by states upon imports.

As to the open accounts which might be included in the bills receivable, the court of appeals declined to pass upon the validity of the taxes on them, as, according to the practice in that state, it was incumbent upon the relator to point out what part on the bills receivable were of that class, but did hold that the cash, and the notes which, it was admitted, were held in New York until maturity, although the proceeds of sale of goods imported and sold in the original packages, were properly within the taxing power of the state of New York under the section of the statute referred to, and that such exercise of power did not violate the Constitution of the United States.

The section of the Constitution relied upon by the plaintiff in error in the argument in this court is article 1, § 10, which provides:

'No state shall, without the consent of the Congress, lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws; and the net produce of all duties and imposts laid by any state on imports or exports shall be for the use of the Treasury of the United States; and all such laws shall be subject to the revision and control of the Congress.'

The contention of the learned counsel for plaintiff in error is succinctly stated in his brief as follows:

'The ground taken by the plaintiff in error is that the tax on the...