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People ex rel. Eickemeyer Dynamo Co. v. Rice

29 Abb. N. Cas. 233 Court N. Y. Supreme Court, General Term, Third Department; English

Delivered by *236 Putnam, J.

Contents

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p. 233
PEOPLE ex rel. EICKEMEYER DYNAMO CO. v. RICE.
N. Y. Supreme Court, General Term, Third Department;
September, 1892.

Headnote

1. Statutes; interpretation.] “ Two ” in a statute, may be read “ two or more,” in order to effectuate the apparent intent.
2. Corporations ; consolidation^ The provision of 1892, c. 668, § 1 (amending L. 1886, c. 143)—that “in case of the consol
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idation of two corporations into a new corporation, said new corporation shall be required to pay the tax hereinbefore pro- . vided for only upon the amount of its capital stock, in excess, of the aggregate amount of capital stock of said two corporations”[1] —applies where more than two corporations consolidate.
Appeal by relator from an order of the Special Term of the Supreme Court, held at Albany, denying his application for peremptory mandamus.
Application for a mandamus made by the EickemeyerField Company, Eickemeyer Dynamo Machine Company, and the Yonkers Machine Company against Frank Rice, secretary of State, to compel the latter to file in his-office, upon the payment of his lawful fees, an agreement made by relators to consolidate into one company under the name of the Eickemeyer-Field Manufacturing Company.
It appeared by the affidavits upon the application for a mandamus that none of the consolidating corporations-had increased their capital stock, and that the capital of the proposed new company did not exceed the aggregate capital of the three consolidating companies.
The secretary of State refused to file the papers on the ground that, by the L. 1892, c. 668, the consolidated, company, the Eickemeyer-Field Manufacturing Co., was. required to pay a tax one-eighth of one per cent, on its-capital stock as a condition precedent to the filing of the.papers.
The Special Term denied the application for mandamus-without opinion.
The further facts are fully stated in the opinion.
p. 235
J. Hampden Dougherty (Smith & Dougherty, attorneys), for appellants.
I. Prior to the amendment, L. 1892, c. 668, a corporation consolidated out of two or more corporations was by the decisions of the courts held to be a new corporation and, therefore, obliged to pay the tax imposed by chapter 143, Laws of 1886 (citing People ex rel. N. Y. Phonograph Co. v. Rice, 57 Hun, 486 ).
II. A special tax law is to be construed most strictly against the State and most favorably to the taxpayer (citing Matter of Enston, 113 N. Y. 174 ; Cooley on Taxation, 2nd ed. 227, 267, 268, 274, 275 ; U. S. v. Wigglesworth, 2 Story, 369 ; Powers v. Barney, 5 Blatchf. 203 ; Dos Passos on Coll. Inheritances, Legacy and Succession Taxes, p. 41).
III. The word “two” may mean more than two-(citing U. S. Constitution, art. I, § 7; Id. art. II, § I, subd. 3 ; Id. art. V ; N. Y. Constitution, art. I, § 9 ; Id.. art. IV, § 9 ; Webster's Internatiojial' Dictionary, phrase “ one or two National Bankrupt Law, § 5103).
IV. Courts will give significance to the words of a statute which the intent of the lawmakers requires (citing Smith v. People, 47 N. Y. 330 ; Bell v. Mayor, etc., 105 Id. 139; People ex rel. Dinsmore v. Croton Aqueduct Board, 5 Abb. Pr. 316 ; Leverson v. The Queen, L. R. 4. Q. B. 394; Dwarris on Statutes, p. 145, note c.).
V. Nothing in the policy of the law prevents a consolidation of a larger number of corporations than two (citing Woodruff v. Erie Railway Co., 93 N. Y. 609 , 615 ; Beach on Private Corporations, § 330; Hill v. Nisbet, 100 Ind. 341 ).
VI. If the statute be construed as exempting two, but not three or more, it is unconstitutional, because it contravenes the 14th amendment to the U. S. Constitution (citing County of San Mateo v. Southern Pac. R. R. Co., 13 Fed. Rep. 722 ).
Simon W. Rosendale, attorney general, for respondent.

The relators, the Eickemeyer-Field Com-pany, The Eickemeyer Dynamo Company, and the Yonkers Machine Company, three corporations duly incorporated under the laws of this State subsequent to 1886, who had ■each, on filing a certificate of organization in the office of the secretary of State, paid the tax required by chapter 143 of the Laws of 1886, on or about June 13, 1892, agreed to consolidate into one corporation, The Eickemeyer-Field Manufacturing Company, also one of the relators. On presenting to the secretary of State the papers showing such •consolidation, he declined to file the same, until the fees, as required by the act of 1886 and amendments thereto, were first paid. At the time of the consolidation in question, chapter 668 of the Laws of 1892, amending chapter 143 of the Laws of 1886, was in force, section 1 of said act ■containing the following provision : “ In case of the consolidation of two corporations into a new corporation, said mew corporation shall be required to pay the tax hereinbefore provided for only upon the amount of its capital stock in excess of the aggregate amount of capital stock of said two corporations [upon which said tax shall have heretofore been paid and no more.]”[1]

The State insists, and the court below held, that the .above quoted provision of the act of 1892 does not apply to a case like this of the consolidation of three corporations. But the statute should be construed to mean two ■only and not two or more.

The word “ two," as in ordinary use, is sometimes intended to mean only two and sometimes two or more. Instances are cited by respondent where the word should Lave the former meaning, and the appellant calls our attention to cases where the word “ two ” as used is evidently intended to mean two or more.

The question before us to be determined is what mean

* Clause in brackets not found in 1 L. 1892 , c. 668, p. 1228.

p. 237
ing should be given to said word as used in the above quoted provision of the act of 1892?

The rules to be followed in the construction of statutes are well settled. It is held that “ The great principle which is to control is the intention of the legislature in passing the same, which intention is to be ascertained from the cause or necessity of making the statute as well as other circumstances. A strict and literal interpretation is not always to be adhered to, and where the case is brought within the intention of the makers of the statute, it is within the statute, although by a technical interpretation it is not within the letter. It is the spirit and purpose of a statute which are to be regarded in its interpretation . . -. a reasonable construction should be adopted in all cases where there is a doubt or uncertainty in regard to the intention of the lawmakers ” (People ex rel. Wood v. Lacombe, 99 N. Y. 43 ; Smith v. People, 47 Id. 330 ; McKuskie v. Hendrickson, 128 Id. 555).

Applying the above doctrine to the case before us, it is to be presumed that the intent of the legislature in enacting the above quoted provision contained in chapter 688 of the Laws of 1892, was to prevent a liability on the part of a corporation which had paid the tax required by. the act of 1886 on a consolidation with another corporation,, which had also paid said tax, to again pay the same tax. The object of the law was to prevent a double taxation. To hold, therefore, that on consolidation of two companies the new corporation was not required to pay a tax under the act of 1886, while on the consolidation of three or more the tax could be legally imposed, would result in making the statute unreasonable and absurd, and in not carrying out what may be presumed to be the intent of the legislature in enacting it. If on consolidation of two companies the tax under the act is not required to be paid, there is no reason why the same exemption from taxation should not follow the combination of three or more corporations.

I think, therefore, that under the rule laid down as to-

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the construction of statutes in the above quoted authorities, the word “ two ” as contained in the above quoted provision of the act of 1892, should be deemed to mean two ■or more in order to carry out the apparent purpose of the legislature.

To give this construction of the law, we are not compelled to go beyond the letter of the statute, as is sometimes done; we are merely giving to the word “ two ” a meaning often given to it as in common use. The meaning of the word as used in the statute is doubtful,'and in such a case it is proper to resort to the intent of the lawmakers in order to determine the sense in which the word was used (Chamberlain v. Western Trans. Co., 44 N. Y. 309 ; People v. City of Buffalo, 57 Hun, 577 ; Donaldson v. Wood, 22 Wend. 397 ).

It follows that the order appealed from should be reversed, with $10 costs and disbursements, and the mandamus asked for by the relators granted, with $50 costs and disbursements.

Herrick, J., concurred.

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