45 Barb. 644 | N.Y. Sup. Ct. | 1866
By the articles of association the board of directors was declared to consist of not less than five nor more than thirteen directors.. To render a person eligible for that position, and qualify him for the exercise of the power and authority incident to it, he was required to be a stockholder to the extent of ten shares of one hundred dollars each. When elected in the manner provided for by the articles of the association, the board of directors was empowered to appoint a president of the bank from their number, and a vice president and cashier, together with such other officers and agents as the business of the association should require. The board was also empowered to carry on the business of banking, in the manner provided for by the statute, and the articles expressly and irrevocably delegated to it all the power, rights, and privileges of each and all of the associates, and of those who might afterwards become such, to be exercised only by the board of directors, and such officers and •agents as it should appoint.
From this ample and comprehensive delegation of authority, the board of directors were authorized to exercise on
It is not necessary to complicate the consideration of this, question, with that so often discussed and examined, whether an association formed under the general banking laws of this state is, or is not, a corporation. So far as' this case is concerned, it will be assumed, as it not improperly may be, that it is a corporation, (Leonardsville Bank v. Willard, 25 N. Y. Rep. 574,) though not a moneyed corporation within the statutory regulations adopted for preventirig the insolvency of corporations of that description. (Leavitt v. Blatchford, 17 N. Y. Rep. 521.) For not being a moneyed corporation, it was not within the prohibition contained in the statute declaring that it shall not be lawful for the directors of a moneyed corporation to divide, withdraw or in any manner pay to the stockholders, or any of them, any part of the capital stock of the corporation, or to reduce such capital without the consent of the legislature. (2 R. S. 5th ed. 217, § 1.) That was intended to relate exclusively to what the statute denominates moneyed corporations, and has never been expressly, or constructively, applied to banking associations, even though corporations. As this is the only express statutory prohibition relating to the reduction or division of corporate capital, the association in question was not disabled by any positive provision of law from either reducing or dividing its capital, except however in the single instance, that where the reduction should be made with the intention of continuing the banking business, it could not be extended so far as to reduce the capital below the sum of $100,000. (Laxos of 1859, p. 627, § 1.)
If the power to divide the capital and dissolve the associ
- For the purpose of determining whether the power to dissolve the association was vested in it, the nature of the statute under which it was formed and the peculiar character of the institution it provided for creating, must be taken into consideration. This statute, as it has been judicially construed, was not originally designed for the creation of associations, although in practice it seems to have been attended with a different result. For the courts have felt compelled to regard the associations formed under the statute as corporations, notwithstanding the conviction that the legislature did not intend them to be so. The intention of the legislature was to regulate the business of banking in such a manner as to .léave all who were disposed to do so, at liberty to 'engage in it, provided the redemption of their circulating notes wére1 properly and adequately secured. And to accom~píiéh-'thaj! end, it provided three distinct modes of carrying .the-business on; by individuals, by partnerships properly so called, and by associations possessing several of the common attributes of corporations, united with some of the
As it is settled by authority, as well as the peculiar nature of the general banking law, that the legislature did not intend the associations formed under it, to be corporations within the common legal understanding of that term, it could not have formed. any part of the legislative design, that the power of voluntarily closing up their business and producing their own dissolution, should be denied them. Under that intent, their power in this respect would be very much like that of an ordinary partnership, but when exercised, as required by law to be, in conformity with certain regulations intended to prevent the abuse of it, and to render its exercise both convenient and safe.
Hence, without conferring the power in express terms, the manner only in which it may be rendered available, is declared and regulated 'by the statute; indicating at the same time the understanding of the legislature that the power inhered in the association, without any express provision declaring that to be the case. That such was the understanding of the legislature, will be seen from an examination of the general banking law, and the amendments since made to it. By section 28 of the law as it was originally adopted, dividends are
These provisions, which were all in full force when this
Under all these different and fluctuating statutes, except that of 1857, which rendered corporate capital taxable according to its actual value only, the corporation or association taxed was entitled to no deduction whatever, on account of losses reducing the actual below .the par value of the capital. In that respect the .rule was rigid and inflexible, which declared the standard of taxation to be the capital paid in, or secured to be paid in, (People v. Supervisors of Niagara, 4 Hill, 20. People v. Commissioners of Taxes, Am. Law Reg. vol 12, 535.) Although the last case, was reversed by the Supreme Court of the United States, its authority in this respect was in no manner disturbed. (Bank Tax Case, 2 Wallace, 200.) Indeed the principle, as a rule of construction, had been fully established by the cases previously cited, and the case of Farmers’ Loan and Trust Co. v. Mayor of New York, (7 Hill, 261.)
If that part of the act of 1857, which relates to this subject, had continued in force, it would have furnished sufficient authority for the exoneration of the relator from taxation so far as its capital was distributed and its stock cancelled. For to that extent," certainly, the value of its capital would have been diminished. But that part of this act was repealed by the statute providing for the taxation of these associations, which was enacted in 1863.
The mere reduction of the capital, under chapter 277 of the Laws of 1859, with the intention of continuing the business of the association on the amount to which it might be reduced, would probably have the effect of rendering that the future measure of its taxation. For after such reduction, the residue remaining would constitute the capital paid in,
The statutes affecting banking associations, formed under the general banking law, have been more flexible than those relating to moneyed and other banking corporations. They have been secured a more ample control over themselves, and their capital and circulation. For, as has been seen, they may reduce the latter, and after its redemption and the payment of their debts, divide their entire assets among their stockholders, and produce their own dissolution without the intervention- of the legislature or the assistance of any legal proceedings whatsoever. Their action, in this respect, is very much like that of an ordinary partnership. For the attainment of those ends, other banking, and all moneyed corporations, are necessarily dependent upon proceedings instituted in a court of law or equity, or the direct intervention of the legislature. (12 Am. Law Reg. 544. 2 R. S. 5th ed. 517, § 1.)
And as those powers were secured to banking associations, as distinguished from other banking and "moneyed corporations, it was both just and necessary, in order to render them available and useful, that a corresponding provision should be enacted in the laws regulating the mode of taxing them. It could not have been the intention of the legislature to allow the association, whose capital had been distributed among its stockholders in the manner contemplated by law, to be made the subject of taxation precisely the same as though no such distribution had been made.
Accordingly it will be found, that while changes have frequently been made since 1847, affecting the extent and manner in which these associations were to be taxed, and
So much of this section of that act as prohibits banking associations, formed under the general banking laws, from being taxed upon that part of their capital distributed among the stockholders, and for which an equivalent amount of stock may have been surrendered and cancelled by the association, must be regarded as applying to the consideration of this case. For as it has not been expressly repealed, and there is no such conflict between it and the subsequent laws, relating to the same general subject, as to produce its repeal by implication, it must still continue in force. The well "established rule on the repeal of statutes'by implication, is that a preceding statute shall not be regarded as repealed by those succeeding it, unless they are so manifestly repugnant as to be incapable of standing together. There is not only an entire absence of inconsistency between these statutes, but in addition to that, the later ones, except the act of 1857, which was in substance, in this respect, like the act of 1847, seem to contemplate the continued existence of this branch of section four, in the act of 1847. And the general banking system would be imperfect and defective without it.
The right of the relator, therefore, to be exonerated from taxation upon that portion of its capital distributed among its stockholders, so far as positive law upon the subject can
It appears by the defendant's answer that at the time they were applied to by the relator to reduce the assessment, its circulating notes had been reduced to the sum of sixty-two thousand two hundred and twenty-seven dollars, which was less than the amount for which it admitted its liability to be taxed. But this was not made to appear to the defendants at the time of the relator's application to reduce the assessment. And if they had then refused to make the reduction on account of the absence of that proof, it is probable that the objection would be allowed to prevail against the present application of the relator, because the statute prohibits the assessment from being made upon a valuation less than the amount of the circulating notes unsurrendered, even though the capital of the association may have been reduced below that. The defendants, however, placed their refusal to reduce the assessment on the ground that the directors were unauthorized to reduce or distribute the capital of the association without taking proceedings for that purpose in law or equity. This excluded the supposition that the proofs exhibited were in any other manner defective. If that objection had been taken, the answer discloses the ability of the relator to have removed it by further proofs. And under those circumstances, it would not only be unjust, but opposed to very well settled authority to permit the defect to have any weight in the present disposition of this case. So far as the objection actually made is concerned, it has already been shown to be entirely untenable.
It is quite evident from this statute that’ the legislature intended that the association should not be liable to taxation upon that part of its capital returned to its stockholders, and for which they had surrendered certificates of stock which the association had cancelled. Subject to the ■ provision that the capital for the purpose of taxation should not be estimated below its circulating notes not returned to the superin
The judgment should be affirmed.
Grover, P. J. and Marvin, J. concurred.
Davis, J. dissented.
Judgment affirmed.
Davis, Grover, Mm-vin and Daniels, Justices.]