54 N.Y.S. 519 | N.Y. App. Div. | 1898
Lead Opinion
The regularity of this proceeding is not .questioned by either party. It seems to be a mode agreed upon by them' by which to bring before the court the question over which they differ, and we do not, therefore, express any opinion upon that subject. The question which we are called upon to consider is whether one who has deposited money in a savings bank within this state is liable to be assessed and taxed for the amount deposited. It is conceded that such amount is subject to be assessed as property of the depositor, and liable to taxation, unless it is expressly exempted by the provisions of subdivision 14 of section 4 of the tax law (chapter 908 of the Laws of 1896). The section relied upon by the respondent reads as follows:
“Sec. 4. The following property shall he exempt from taxation: * * * Subd. 14. The deposits in any bank for savings which are due depositors, the accumulations in any domestic life insurance corporation, held for the exclusive benefit of the insured, other than real estate and stocks, now liable for taxation; and the accumulations of any incorporated co-operative loan association upon the shares of such association held by any person.”
Here seems to be a very clear intent to exempt entirely from taxation the property therein described as “deposits in any bank for savings which are due depositors.” There is no difficulty in determining that whatever was ° meant by the phrase “deposits * * * due depositors” must be exempted from taxation, where-ever found; and, when we shall have ascertained the correct meaning of that phrase, the question presented will have been solved. It has been repeatedly and for a long time held that the relation existing between a savings bank and its depositors is that of debtor and creditors. In People v. Mechanics’ & Traders’ Sav. Inst., 92 N. Y. 7, Judge Andrews says, “The primary relation of a depositor in a savings bank to the corporation is that of a creditor, and not that of a beneficiary of a trust;” and the same relation has been declared in many other cases. Fowler v. Bank, 113 N. Y. 450, 453, 21 N. E. 172. This relation is an important factor in construing the section in question. Such being the relation, when a deposit is made the ownership of the money passes to the bank, and becomes a part of its assets. In exchange therefor there accrues to the depositor, by force of the contract of deposit, an indebtedness against the bank, to the extent of the amount deposited. Subdivision. 4 of section 2‘ of the tax law declares that such a debt is personal property; and hence upon such a deposit there arise two species of property, each liable to taxation,—one, the money which is left with, and has become the property of, the bank; the other, the debt which has accrued to, and become the property of, the depositor. Which of these two properties is intended by the use of the words “deposits- * * * which are due depositors”? It is urged upon us that by the word “deposits” is meant the money received by the bank, or the securities into which it has been converted, and that, inasmuch as these are the property of the bank, the exemption extends to the bank alone-. This construction is based upon the idea that the mere purpose of this section is to relieve against the double taxation which would otherwise result. It is claimed that the legislature might well relieve from taxation, at the place where the bank was located, the
*522 “The Lank is liable to pay the depositor the amount oí his deposit, as a debt. This being so, it follows that the amount is to be deducted from the gross assets, as a liability.”
See, also, the case at special term. 17 Misc. Rep. 180, 40 N. Y. Supp. 1001.
Thus, the question is settled that “deposits due to depositors” are debts against the savings bank, which, like any citizen, it has the right to set off against the valuation of its taxable personal property; and this right is secured to it by the twenty-first section of the present tax law. Reading this section, as we must, in connection with the fourteenth subdivision, we are practically forced to the conclusion that the legislature did not, by the phrase in question, intend to refer to the assets of the bank. Such assets, or so much of them as should equal the deposits due depositors, the assessors were, by another section, prohibited from putting upon the assessment roll. The exemption intended was evidently something other than that, and an intelligent construction requires that some other meaning be given to the phrase. . There is but one other meaning that can be given to it. Section 4, of which subdivision 14 is a part, specifies the general exemptions which are allowed by the scheme of taxation created by the act, and the language of subdivision 14 is as applicable to individuals as to a bank. The words, “deposits in any bank for savings which are due to depositors,” describe the property of the depositor fully as accurately as they do the property of the bank; and as it cannot, in reason, refer to the latter, we must accept the conclusion that the former was intended. Finding, as I do, in the language of the statute itself, so clear an intent to exempt depositors in savings banks from taxation on their deposits, it would be neither useful nor proper to discuss the propriety of the exemption. I do not forget the rule that the intent to exempt “must not be presumed, but must be found plainly expressed in the statute.” People v. Commissioners of Taxes of New York, 95 N. Y. 557. But, as I have said above, the intent to exempt from all taxation, and wherever found, that species of property designated as “deposits in any bank for savings which are. due depositors,” cannot be doubted; and, for the reasons above given, I think the meaning of that phrase, and the intent of the legislature, are too clear to be changed by judicial construction.
The order denying the mandamus was therefore correct, and should be affirmed.
Order affirmed, with $10 costs and disbursements. All concur, except LANDON and PUTNAM, JJ., dissenting.
Dissenting Opinion
When a deposit is made, the money deposited is the property of the bank. The bank owes the depositor the amount of the deposit, and the statute exempting “the deposits due depositors” is satisfied by allowing the bank to deduct the amount from the property it acquired by the .deposit itself. The depositor, being the creditor of the bank, has property in the credit. As statutes of exemption from general taxation must be strictly construed in favor of the state and against the individual, the depositor is, by strict construction, excluded from the exemption.
