State v. N.Y., N. H. & H. R. Co.

• Decision Date: 20 April 1891
• Citation: State v. N.Y., N. H. & H. R. Co., 22 A. 765, 60 Conn. 326 (Conn. 1891)
• Court: Connecticut Supreme Court
• Parties: STATE v. NEW YORK, N. H. & H. R. CO.

22 A. 765

60 Conn. 326

STATE

v. NEW YORK, N. H. & H. R. CO.

Supreme Court of Errors of Connecticut.

April 20, 1891.

Case reserved from superior court, Hartford county.

Action by the state of Connecticut to recover unpaid taxes due from the New York, New Haven & Hartford Railroad Company. Reserved on facts found.

A. P. Hyde and C. E. Gross, for plaintiff.

H. C. Robinson and G. D. Watrous, for defendant.

ANDREWS, C. J. This is an action brought by the state to recover certain arrears of taxes claimed to be due from the defendant for the years 1880 to 1885, both inclusive. The questions are reserved for the advice of this court.

This state has for many years practiced a special method of imposing taxes on railroads, and on some other classes of corporations, differing widely from the general method of taxation on other kinds of property. The statutes that were in force during the years above named, repecting the taxation of railroads, were sections 5-7, tit. 12, c. 5, Revision 1875, as amended by chapters 60, 81, Acts 1876, and sections 11, 12, 21, of the same title and chapter of that Revision. These sections, with the amendments referred to incorporated, are as follows: "Sec. 5. The secretary or treasurer of every railroad company, any portion of whose road is in this state, shall within the first ten days of January, annually, deliver to the comptroller a sworn statement of the number of shares of its stock, and the market value of each share, the amount and market value of its funded and floating debt, the amount of bonds issued by any town or city of the description mentioned in the twelfth section of chapter first of this title, when the avails of such bonds, or the stock subscribed and paid for therewith, shall have been expended in such construction, the amount of cash on hand on the first day of said month, the whole length of its road, and the length of those portions thereof lying without this state, and also the number, nnme, and length of each of its branches lying in this state. Sec. 6. Each of said railroad companies shall, on or before the twentieth day of January, annually, pay to the state one per cent. of the valuation of its stock, funded and floating debt, and bonds as contained in said statement, after deducting from such valuation the amount of cash on hand, and from said sum required to be paid, the amount paid for taxes upon the real estate owned by it and not used for railroad purposes; and the valuation so made and corrected by the board of equalization shall be the measure of value of such railroad, its rights, franchises, and property in this state for purposes of taxation; and this sum shall be in lieu of all other taxes on its franchises, funded and floating debt, and railroad property in this state. Sec. 7. When only a part of a railroad lies in this state, the company owning such road shall pay one per cent. on such proportion of the above-named valuation as the length of its road lying in this state bears to the entire length of said road. But in fixing the aforesaid valuation and length, neither the value nor length of any branch thereof in this state which the board of equalization shall determine to be of less value per mile than one-fourth of the average value per mile of the trunk road shall be included; but every such branch shall be estimated at its true and just value by the board of equalization, and such railroad company shall pay to the treasurer of this state one per cent. on such value at the time fixed for the payment of other railroad taxes; and when any such sum becomes due, and such company shall not then have the management and control of its road, or the road bearing its name, the person or corporation then owning or managing such railroad shall pay such sum to the state within the time above prescribed." "Sec. 11. The board of equalization shall examine and correct all statements returned to the comptroller as required by either of the nine preceding sections; and if any person shall not make such return as prescribed, or shall make erroneous returns, said board shall, within ten days after the time limited for making the same, make out, upon the best information which they can obtain, the statement required to be made and returned by such person; and a true copy of each statement as corrected or made out by said board shall be returned to each cashier, treasurer, secretary, superintendent, or manager, and the valuation of the several items of money, estate, amount, and number contained in such statement shall be final, and the sums required shall be paid according to it. Sec. 12. Every person who shall fail to return to the comptroller, as prescribed in any of the preceding sections of this chapter, any statement required to be returned, shall forfeit five hundred dollars to the state; and every person or corporation required by any section of this chapter to make any payment to the state, who shall fail to make it within the time therein limited, shall forfeit to the state twice the amount required for such payment. ""Sec. 21. No action' commenced by the state against any person or corporation for the recovery of any sum in the nature of a tax, which he or it is required to pay by the provisions of this chapter, or for the recovery of the penalty for the non-payment thereof, shall be barred or defeated by reason of the omission or failure of the board of equalization to perform the duties required of them by this chapter."

In each of the years above named the treasurer of the defendant made out and delivered to the comptroller, within the first 10 days of January, a sworn statement purporting and intended to be a true statement of the affairs of that company on the 1st day of the month, for the purpose of taxation, and as required by law. In the year 1880 the board of equalization approved the statement so made by the defendant's treasurer, and the taxes for that year were afterwards paid by the defendant to the state, based on the statement so made and approved. In the year 1881 the board corrected the statement made by the treasurer by increasing the valuation placed upon the shares of the capital stock by him. The board made no other change. A true copy of the statement as thus corrected was returned by the board to the treasurer of the company. The taxes for that year were afterwards paid by the defendant to the state, based upon the corrected statement. In the years 1882, 1883, 1884, and 1885 the board corrected the statements sent to them by the defendant's treasurer, by increasing the valuation of the shares of the capital stock, but made no other change, and each year returned to the treasurer a copy of the statement so corrected by them, and each year the taxes were paid based upon such corrected statement. It is claimed by the state that each year the amount of "cash on hand" was very much less than the sum mentioned in the statements, so that in each of said years the defendant paid less taxes to the state than the state intended it should pay, and much less than it ought to have paid; amounting in all, with interest, according to the computation of counsel, to more than $125,000. No claim is made that said statements were erroneous in any other respect.

We assent to the argument made by the counsel for the state that the words"cash on hand," as used in said sixth section intended "ready money,"or that which in ordinary business usage is the same thing. Banknotes, checks, drafts, bills of exchange, certificates of deposit, or other like instruments which pass with or without indorsement from hand to hand as money, or are immediately convertible into money, fall properly enough within the words "cash on hand. "But there is no elasticity of speech to which the words of the statute can be subjected that will permit many of the things included by the defendant in its item of cash on hand to be regarded as cash. Loans to other railroads on long time, stock of other companies not intended to be sold, and other investments of like kind, are clearly not cash on hand. "Cash on hand "means

money at hand ready to be used, actual cash or its equivalent, and actually on hand. The intent of the statute in this respect is now put beyond controversy by an amendment made in 1887. The language now is: "The amount of money actually on hand in cash in the treasury or in the possession of the proper officers or agents of the company." This amendment does not change the meaning. It serves only to make misinterpretation impossible. The amount of the sums so improperly included in the item of cash on hand we have not found it necessary to compute.

None of the sections above quoted, nor does any other section of the statutes, provide a means for the collection of the taxes so required to be paid. No levy or execution or other process in the nature of a distress is authorized, nor is there any proceeding specified by which an unwilling corporation can be coerced to make payment. A statute passed in 1881, now section 3901 of the General Statutes, while providing that...