McLean v. Jephson

This was an application to the supreme court by the receiver of taxes in the city of New York, under § 857 of the city charter, chap. 410, Laws of 1882, for a warrant to enforce the payment of a tax upon personal property by a non-resident. The section authorizing the proceeding reads as follows: “In case of the refusal or neglect of any person to pay any tax imposed on him for personal property, if .there be no goods or chattels in his possession upon which the same may be levied by distress and sale according to law," and if the property assessed shall exceed the sum of one thousand dollars, the said receiver, if he has reason to believe that the person taxed has debts, credits, choses in action, or other personal property not taxed elsewhere in this state, and upon which levy cannot be made according to law, may thereupon in his discretion make application, within one year, to the court of common pleas of the county, or the supreme court, to enforce the payment of such tax.” The application was based upon a petition, alleging the imposition of the tax upon the defendant in the year 1883, as a non-resident doing business, and having capital invested therein, in the city of New York. An order to show cause why the relief asked should not be granted was issued and served upon the defendant, and upon the return day thereof he appeared and showed that he was, at the time the alleged assessment was made, and for a long time previous thereto had been, a resident of the state of New Jersey, and had never transacted business in the city of New York, except as the agent of a corporation organized and doing business in the State of New Jersey as a manufacturer of carriages; that the company had a wareroom in the city of New York for the exhibition and sale of its own manufactures, and that defendant had charge of such ware-room as its agent. These facts were undisputed, and must be considered as conclusively established in the further consideration of the case.

The authority of the assessors to make the assessment in question is claimed to have been derived from § 1, chapter 37 of the Laws of 1855, which reads as follows: “All persons and associations doing business' in the state of New York as merchants,

The authority of its officers to exercise the powers of taxation has uniformly been carefully scrutinized and limited to the express warrant of the statute, and cannot be extended by implication or construction. This is esjoecially the case where its demands may be enforced by fine and imprisonment, and it would be contrary to the traditions of our people, as well as to principles of justice and law, to permit the liberty of the citizen to be jeopardized by a strained and doubtful construction of a statute. The defendant has, confessedly, been assessed upon property which he did not own, and is now threatened with imprisonment, unless he pays the illegal exaction. -The only authority the tax commissioners had to assess the personal property of a non-resident was in the event that he employed it in carrying on a business in this state, as principal or partner. But the defendant has been taxed upon an investment which he never made, and upon a business carried on by other parties. This has been done upon the theory, not that he had property and was carrying on such business, but because he was negligent in failing to examine the assessment

We are of the opinion that the defendant was under no obligation to examine the assessment lists of the city of New York. It is not claimed that [the notices published by the assessors contained any intimation that an assessment had been made against the defendant, or that he had personal notice in any other form of the making of such assessment. There was no law making the defendant liable to taxation in New York, and no foundation for •a claim that he knew, or had any reason to suppose, that an assessment had been made against him. He was under no greater obligation to examine the assessment lists of New York city than any other of the thousands of citizens of other states who visited that city during the year 1883. A person subject to taxation in a particular place may well be held liable for an erroneous assesssment if he neglects to examine the rolls and obtain correction of errors therein; but a non-resident having no taxable property in such locality, and no just reason to suppose he has been taxed, is under no such obligation. He may safely rely upon his immunity from ■taxation in any place where he does not reside, and is not compelled to anticipate and thwart the act of public officers proceed- , ing without authority of law in such places. The published notices of the completion of assessment rolls required by the statute are intended for the information of taxpayers within the jurisdiction of the particular assessment officers, and can have no ■operation upon non-residents of such locality, who have no property liable to taxation therein.

We think the authorities are clearly adverse to the decision of the court below. It is conceded that the question depends upon the fact whether the assessors had jurisdiction to make the assessment. If they had not, then the assessment is, confessedly, void.

The authorities in this state seem to be quite uniform to the effect that the question whether persons or property are assessable under the statutes is a jurisdictional question and is always open. to inquiry when the authority to make an assessment is assailed. The case of Dorn v. Backer, 61 N. Y., 261 , cannot, we think, on-principle, be distinguished from this case. That was an action against the assessor to recover damages for wrongfully assessing; the plaintiff’s farm in the town of Ava. The farm lay partly in Ava and partly in Boonville. It was assessable in the township where he resided. He had formerly occupied a house upon that-part of his farm lying in the town of Ava. Subsequently he removed into a small house built on the land in Boonville and had apparently resided there some years. It was there declared, “ it. may be said now to be settled that assessors cannot acquire jurisdiction by deciding that they have it Before assessing the plaintiff for taxation in the town of Ava, it was essential that he should be a resident of that town, and if not they had no jurisdiction.”' It was held that the action was sustainable. In National Bank of Chemung v. City of Elmira, 53 N. Y., 49 , the action was to recover damages for the conversion of plaintiff’s property. The-defendant justified under an allegation that the property was taken by its collector to satisfy a tax duly imposed upon the capital o£ the bank by the assessors of the city. Under the law, chap. 761,, Laws of 1866, the capital of a bank was not assessable. The late Chief Judge Church, writing the opinion of the court, says, “ It. is claimed that the assessors had jurisdiction to make the assessment; that their act was judicial and, although erroneous, is conclusive until reversed by a direct proceeding instituted for thatpurpose. This proposition cannot be predicated of this case, either in fact or in-law. Someof the dutiesof assessors are judicial in their nature, and as to them, while acting within the scope of their authority, they are protected from attack, collaterally, to the same extent as other judicial officers ; but they are subordinate officers, possessing no authority, except such as is conferred upon them by statute, and it is a well settled and salutary rule that such officers must see that they act within the authority committed to them. * *

So when their right to act depends upon the existence of some-fact which they erroneously determine to exist, their acts are void, * * * This court held in 15 N. Y, 316 , that if the assessors erred in determining whether a person was a taxable inhabitant of a town, they did so at their peril, and were liable to an action by

In view of the fact that the authorities on this point are all uniform, we will only refer to the Matter of New York Catholic Protectory, 77 N. Y., 342 , because it recognizes as an established principle that the determination by assessors that a person or his property are taxable is jurisdictional, and that an error-made by them in such determination against the taxpayer is fatal to the validity of the assessment. Judge Rapallo, writing the opinion of the court, says: “ By the act amending their charter (§ 3, chap. 647, Laws of 1866), it is provided that the real and personal estate belonging to and used for the charitable purposes of said association shall be exempt from taxation.’ That the land upon which the tax in question was imposed belonged to the petitioners, and was used for such charitable purposes, is alleged in the petition and not controverted in any manner. The assessors consequently had no jurisdiction to assess that land; and even if they be deemed to have determined as a fact that the land was not so used as to bring it within the exception, their determination was not conclusive, the fact being one upon which their jurisdiction depended. If the jurisdictional fact did not exist, the determination of the assessors could not establish jurisdiction in them.”

The assessment officers in this case had authority to assess the property of a non-resident, doing business in this state as a principal or partner, having money invested in the business, and in such case only. Their authority to assess depended upon the fact that he was engaged in business, and not upon appearances which might be deceptive and uncertain. The defendant, concededly, was not a principal or partner in any business'conducted in this state, and had no money invested in such business. His principal might have been engaged in such business, and might have been 'liable to taxation; but even as to that there is some question. The Parker Mills v. Comrs of Taxes, 23 N. Y., 242 . But the defendant was not only not liable to be assessed, but the case does not show that there were any reasonable grounds for supposing that

The orders of the general and spiecial terms should be reversed,, and the application of the petitioner denied, with costs in all courts.

All concur.