46 N.Y.S. 385 | N.Y. App. Div. | 1897
This controversy proceeds from the struggle that still exists by the boards of assessors of various cities to continue to tax the capital stock of corporations under the method that generally, if not uniformly, prevailed throughout the State until the decision in the case of The People ex rel. Union Trust Co. v. Coleman (126 N. Y. 448) and the various cases in the Court of Appeals following that decision. Before the decision of The Union Trust Co. case it had been the rule with the assessors that, where the shares of the stock of a corporation sold at or above par, to treat that fact as conclusive evidence that the capital stock had not been impaired and, in assessing the corporation for personalty, to deduct only its real estate, the amount of stock held by them in other corporations, and the amount of their stock held by charitable, literary and eleemosynary institutions. The decision cited overthrew this rale and worked a revolution in the method of assessing corporations and the extent of their
It is necessary to examine the return of the relator and the evidence of its president and see, first, whether that evidence affords any authority for the imposition of a tax on the relator for personalty, and, second, whether the evidence is of such a nature as justified the board of assessors in disregarding it. The return and statement were to the effect that the capital stock of the corporation was $12,000,000, and was all paid in; that the actual value of all the assets of the corporation was $8,079,271.82 ; that the assessed value of its real estate, including its tracks, ivas $5,471,570, and that its indebtedness was $6,925,000. The sum. of these last, two items, which the relator was entitled to deduct from the value of its assets, is $12,396,570. The result is that the relator’s property stands $4,317,298.18 below the point at which it would be liable for any assessment for personalty. The items of the assets are given with the greatest detail and the basis of the valuations of such items stated with the greatest particularity. I cannot find that these statements are in any wise impeached. It is neither alleged nor shown that the relator owns any other property than that returned, or that the value of any particular piece of property is underestimated. The details of the' return are criticised but in oné respect, which I will allude to hereafter. It is, however, sought to impeach the credibility of this return by showing the financial condition of the company. The roads of the company and its property are leased to the Brooklyn Heights Railroad Company, which agrees to pay as rental, over the taxes, etc., ten per cent on the capital stock of the lessor and. also the interest on its bonds. For the market value of the shares of stock the president of the relator refers
We think that the order directing a reassessment also was properly made. The relator borrowed $6,000,000 some few years ago. The assessors asked for the details "of the expenditure of that sum. This the witness was unable to give, but referred the assessors to the books of the corporation, which he stated he would produce. The books of the company were not, in fact, produced. These the assessors were entitled to examine to see how the capital of the corporation and money borrowed by it were expended, because the details of such expenditures might show the existence of personal property not returned to the assessors. The president of the relator is hardly subject to criticism in not producing the books, because there seems to have been no subsequent application for them. The matter seems to have been left inchoate and undetermined. We, therefore, think it wise that there should be a rehearing before the assessors on which they may probe the returns of the company to any further extent that they may desire and obtain any further evidence as to the assets of the cprporation. But the assessment must be laid in accordance with the law, and the fact that the justice or the favor of the statutes of the State, as construed by the courts, renders this relator subject to local taxation on some $5,000,000, and it exempts
The order appealed from' should be affirmed, without costs to either party.
All concurred.
Order affirmed, without costs.