People ex rel. Schurz v. Cook — 14 N.Y. St. Rep. 276

Majority

p. 276

The People ex rel. Carl Schurz et al., App’lts, v. Frederick Cook, Secretary of State, Resp’t.

(Supreme Court, General Term, Third Department,

Filed January, 1888 )

Headnote

1. Corporations—Tax upon stock of new corporations is constitutional—Laws 1886, chap. 143

It is provided by Laws 1886, chapter 143 that every corporation organized by or under any general or special law of this state, having capital stock divided into shares is required to pay to the state treasurer a tax of one-eighth of one per cent, upon the amount of the capital stock, and that, the secretary of state shall 'not file any certificate of such corporation until satisfied that such tax has been paid to the state treasurer. Held, That it was competent for the state to refuse to file articles of incorporation except upon such terms and conditions as might be imposed by the legislature.

2. Same—Laws 1886, chap. 143—Corporations whose stock consists of-PROPERTY FORMERLY BELONGING TO CORPORATIONS SINCE INSOLVENT—■ Stock of, not' exempt.

Held, That a corporation was not withdrawn from the operation of the statute, because its effects and property were wholly or in part made up of goods which had belonged- to another corporation which had gone out of existence.

G. Zabriskie, for app’lts; D. O'Brien, attorney-general, for resp’t.

By chapter 148 of the laws of the legislature of 1886, every corporation organized by or under any general or special law of this state, having capital stock divided into shares, was required to pay to the state treasurer a tax of one eighth of one per cent, upon the amount of the capi tal stock; and the same act prohibited' the secretary of state from filing any certificate of such corporation until satisfied

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that such tax had been paid to the state treasurer. The act is comprehensive and clear cut in its terms, is free from ambiguity and covers the case of just such a corporation as the relators represent.

It is in every respect a new company founded it is true upon the ruins of an older company which had failed, or rather, perhaps, upon the stranded remains of several old defunct companies; but it was nevertheless a new company.

The prior companies had gone down, ceased to have cor - porate being, and the relators who had become the purchasers of the effects left by the insolvent companies, organized a new one.

The acts under which the relators seek relief, chapter 430 of the Laws of 1874, and chapter 446 Laws of 1876, in terms provide for the formation of new companies.

The learned counsel for the appellant when pressed with the objection that there had been a change in the sum of the capital stock, protests with much effect that “ this company never existed until the incorporation, of the relators, and never had “ ány other capital stock than that named in their certificate of organization.”

The relators’ company then comes within the provisions of the act of 1886 and must pay the tax so provided before the secretary of state is authorized to file the certificate.

It does not withdraw the case from the operation of the statute, because its effects and property are in part or in whole made up of the same goods which once belonged to another company. ¡Nor does any constitutional difficulty come in the way, as is seen by the counsel for relators.

There is no contract on the part of the state to file articles of association, except upon such terms and conditions as may be added by the legislature.

It is only by virtue of the laws enacted by the legislature, that the relators are enabled to form a corporation or to make a record of the same; so the same power which creates or which makes the grant, may impose such conditions as to it seems just.

It was entirely competent, for the legislature to make the filing of a certificate, conditional, and to require any payment as a condition preceden!. . Whether the payment required is called a tax or is given any other name, does not matter.

It says in plain terms to any parties who desire to incorporate and put the evidence of incorporation on record, “you may do so upon paying in to the state, one-eighth of one per cent, upon your capital, otherwise it cannot be filed.”

The parties may omit to incorporate or to proceed, if disinclined to do so, upon the terms offered by the state.

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It follows that the order of the special term was right, and must be affirmed, with ten dollars costs and disbursements.

Lakdon and Parker, JJ., concur.