People ex rel. Thurber-Whyland Co. v. Barker — 25 N.Y.S. 394

Majority

p. 394

PEOPLE ex rel. THURBER-WHYLAND CO. v. BARKER et al.

(Supreme Court, General Term, First Department.

October 13, 1893.)

Headnote

"Taxation—Assessment—Money Invested in Business.

A foreign corporation doing business in New York was assessed for taxation at $500,000 under Laws 1855, c. 37, § 1, providing that all sums invested in business in New York are taxable. It appeared that the corporation had $750,000-invested in its business in New York, and that the moneys owing to it amounted to $1,400,000, and that the whole amount of its debts was about $1,200,000. Held that, whether the debts should have been deducted or not, the assessment was not excessive, since the credits would have to be considered, if the debts were to be deducted, in order to determine what debts are chargeable to capital.

Appeal from special term, New York county.

Certiorari by the Thurber-Whyland Company to review an assessment for taxation made by Edward P. Barker and others, commissioners of taxes and assessments of the city of New York. From •an order dismissing the writ, relator appeals.

Affirmed.

Relator, a New Jersey corporation having its principal office in Jersey City, and transacting business in the city of New York, where it also maintained an office, was assessed for taxation for the year 1892 in the sum of $500,000, being the capital of the relator invested in business in New York state. The original assessment for the said year was $3,000,000, which was reduced, upon ■due application by the relator, while the books of annual record were open for correction. The grievance of the relator is set forth in its petition as follows: “Petitioner has claimed and protested to said commissioners that on the second Monday of January, 1892, the petitioner had no personal property subject to taxation, for the reason that the "whole amount of its capital invested in, and the whole sum invested in any manner in, its business •in the city of New York, was only $750,000, and the whole amount of its -debts was $1,218,904, and that by reason of its said debts, which it was en

p. 395

titled to deduct from the whole sum, as aforesaid, invested in its business, it was not liable to the tax sought to be imposed upon it.” It further appears from the petition that the whole amount of relator’s capital stock issued was $2,500,000, of which $100,000 was for cash, and the rest for “property consisting of merchandise, trade-marks, good will, etc.,” and that the “balance of its capital was employed outside the city of New York, principally in the form of accounts receivable, amounting to about $1,400,000.” It does not appear that any portion of the $1,400,000 of accounts receivable was invested outside of the state of New York.

The opinion of Mr. Justice Beach at special term is as follows:

The principle regulating the taxation of relator is furnished by Laws 1855, c. 37. The statute provides for assessment and taxation “on all sums invested in any manner in said business the same as if they were residents of this state.” A resident is entitled to the deduction of just debts owing by him. 1 Rev. St. p. 390, § 9. The relator is therefore entitled to a deduction of its just debts. Notwithstanding this conclusion, I think the action of the respondents is right. They are not bound to accept any one fact stated by relator as indispensable. The pertinent one referred to is that the sums invested in its business in this state amounted to seven hundred and fifty thousand dollars. It also appears from the return that the relator conducts its business in the city of New York, and at time of assessment was possessed, in addition, of bills receivable, or moneys owing to it, in amount to about one million four hundred thousand dollars. A resident of the state is taxable upon all “debts and obligations for the payment of money due or owing” to him; the same principle granting relator a deduction for its debts under this sum as credits liable to taxation. The respondents rightfully so considered, so far as appears, and their conclusion is therefore deemed correct. The bills receivable of relator are, in law, “invested in its business” carried on in this state. The writ is dismissed.

Argued before VAN BRUNT, P. J., and PARKER, J.

L. C. Wachner, for appellant.

William H. Clark, Corp. Counsel, (G-. S. Coleman and James M. Ward, of counsel,) for respondents.

It does not seem to be necessary to decide the question as to whether, when an assessment is levied under section 1 of chapter 37 of the Laws of 1855, which provides for the levying of assessments on all sums invested in any manner in business by all persons and associations doing business in the state of Hew York, the general indebtedness of such person or association should be considered, because, if debts are to be deducted from the sums invested in any manner in said business, then, certainly, outstanding credits must be considered, for, in order to determine what debts are chargeable to capital, the moneys to be received and properly applicable to the payment of debts in the ordinary course of business must be taken into account. Adopting this rule, it follows that the assessment is correct. The order should be affirmed, with $10 costs and disbursements.