141 N.Y. 251 | NY | 1894
We are unable to distinguish this case from that of People exrel. v. Barker (
We might safely rest upon the authority cited, but since the point now urged was not then seriously argued or discussed, and is pressed specially upon our attention, we deem it proper to give it some degree of consideration. It proceeds upon an inference or presumption. The argument is that under the Revised Statutes any declaration of a dividend except out of surplus is forbidden, since otherwise the capital is necessarily impaired by the distribution to stockholders: that no such violation of the law is to be presumed, but rather a due compliance with its terms: that a presumption of such compliance arises from the fact of a dividend declared and paid, and so the lawful and necessary inference is that the capital has not been impaired, but that over and above it the necessary surplus had been accumulated: that such inference is inconsistent with and contradicts the statement made, showing the actual capital to have fallen from fifteen millions to about one-third of that amount: and so the commissioners had a right to disbelieve that statement and fix the value of the capital upon their own judgment. There are two answers to this contention, one of which questions the presumption, and the other at least balances and nullifies it.
In the first place, the relator was incorporated under the general act of 1848, and the prohibition of the Revised Statutes does not apply. That general act has its own prohibition and attaches its own sole and peculiar penalty, and one which leaves the companies in the matter of making dividends with an equal if not greater liberty. (Excelsior Co. v. Lacey,
But what there is of it is rebutted by another presumption springing from the facts which is that against the commission of fraud or crime. Here the treasurer of the company has sworn to a shrinking of the capital from fifteen millions to about nine millions, further chargeable with nearly five millions of debts, and obviously could not have honestly made that statement if in truth there had been no shrinkage of values at all, and so the two possible presumptions may be said to balance and neutralize each other.
These suggestions serve to show that the duty of the tax commissioners is not to subordinate facts, fairly disclosed and uncontradicted, to the influence of presumptions amounting to little more than a guess or possibility, but to deal with them fairly and intelligently. These officers are armed with power to ascertain the truth of answers given to their formal inquiries, and should always do so when the means of investigation are put before them. Here the facts for which they asked, and all that they asked, were furnished under the oath of the relator's treasurer. If they were dissatisfied with his valuation of assets in gross they could have required them to be given in detail and so been enabled to judge of the fairness or unfairness of the valuation; but they were not justified in assuming that the treasurer, for the purpose of evading taxation, had falsely underestimated the assets, because of a recent dividend, *256 the declaration of which did not necessarily involve the fact of an unimpaired capital. I think, therefore, that we were right in saying in the case cited that the declaration of a dividend even if sufficiently recent is an immaterial circumstance where the actual facts are furnished to the full extent required which show the real amount and value of the capital. Those facts may be investigated, but must not be disregarded to make room for doubtful presumptions.
The orders of the General and Special Terms should be reversed, without costs.
All concur.
Orders reversed.