People ex rel. Frederick A. Stokes Co. v. Roberts — 71 N.Y. St. Rep. 409

Majority

p. 409

People ex rel. Frederick A. Stokes Company, App’lt, v. James A. Roberts, as Comptroller, etc., Resp’t.

(Supreme Court, General Term, Third Department,

Filed December 3, 1895.)

Headnote

1. Taxes—Corporations—Exempt.

A corporation, part of whose business is to buy and sell goods not manufactured by it, is not wholly engaged in manufacturing within the state so as to exempt it from taxation.

2. Same—Time of settlement.

The comptroller may settle an account for taxes after January 15th in the year in which such tax becomes due.

8. Same—Valuation.

The valuation by the comptroller will not be disturbed unless clearly erroneous.

p. 410

Certiorari to review an assessment.

James W. Eaton, for relator;

T. E. Hancock, Atty. Gen. (G. D. B. Hasbrouck, Dep. Atty. Gen., of counsel), for resp’t.

Relator was incorporated in April, 1890, under the provisions of an act of the legislature passed on the 17th day of February, 1848, entitled “An act to authorize the formation of corporations for manufacturing, mining, and mechanical purposes,” by making and filing the certificates required by the statute. The certificate stated the objects for which the company was formed as follows, viz.:

“To carry on the business of printing, publishing, and selling books, pamphlets, pictures, engravings, photographs, and prints of all kinds, and newspapers, manufacturing, buying, and selling stationery and stationery articles, writing materials, objects of árt, and ornaments of all kinds, and to do any and all business connected with or appertaining to a general printing, publishing, and bookselling business.”

It will be seen that relator, by' its charter, was not only authorized to carry on the biisiness of printing, publishing, and selling books, pamphlets, pictures, engravings, and photographs, but also was empowered to buy and sell stationery and other articles, and to do any and all business connected with or pertaining to printing, publishing, and book-selling business. The evidence shows that the particular business actually carried on by relator since its incorporation has been the publishing, printing, and selling books. It has been held that a corporation, engaged in such a business is a manufacturer. Evening Journal Ass’n v. State Board of Assessors, 47 N. J. Law, 36 -42. Assuming the doctrine stated in the case cited to be correct, relator since its incorporation has been engaged in carrying on a manufacturing-business. And is was such although, in printing and publishing books, relator employed contractors to perform portions of the work. The testimony of the witness Foster shows that the relator, although contracting with other parties to do the printing, binding, and other-portions of the work on the books it published, yet that much of the work necessary to produce and manufacture such books was done by relator or its employes. We think the evidence of the witness named shows that the books published by relator were in fact manufactured by it, and hence should be inclined to believe, if it appeared that the printing, publishing, and selling of books was the only business relator had been engaged in since its incorporation, that it was not liable for the tax imposed on it under the provisions of chapter 542, Laws 1880, and acts amendatory thereof.

But, under the provisions of that act, relator is liable to taxation on its franchise or business unless wholly engaged in carrying on a manufacturing business. It appears that outside of its

p. 411

business of printing, publishing, and selling books, relator, each year since its incorporation, has been engaged in buying and selling foreign books, and has invested in that business yearly the sum of $11,000. It is impossible, therefore, to say that, during the years for which the comptroller imposed a tax on relator, under the provisions of the act of 1880, it was wholly engaged in the business of manufacturing. As it appears that during the period mentioned it also used a portion of its capital for the purchase and sale of foreign books, it was, therefore, liable to the tax .imposed upon it. People ex rel. Tiffany & Co. v. Campbell, 144 N. Y. 166 ; 63 St. Rep. 44 . The fact that relator’s principal business was printing, publishing, and selling books, and that only a small part of its capital was used in the purchase of foreign books, does not render tor was $3,000,000, and the yearly amount expended in the pur - chase of goods not manufactured by the firm was only $300,000. In this case the capital of the corporation is $105,000, and the amount expended each year in the purchase of books not manufactured by the company was $11,000. In the opinion of Andrews, J., in the Tiffany Case, it is not suggested that Tiffany & Co. were exempted from taxation under the act of 1880, except for that part of its capital employed in buying and selling goods, on the ground that the amount used in that way was inconsiderable as compared with the amount of its capital. He places such exemption of the corporation on the ground that the purchase and sale of the goods was not within its corporate powers,'and says:

“The statute was not aimed at, and did not contemplate the exercise by, a corporation of powers ultra vires. If a manufacturing corporation is engaged in business outside of its corporate powers, in connection with its manufacturing business, it does not cease to be ‘wholly engaged’ in the business of manufacture; that is to say, its only legal and authorized business was that of manufacture. It-subjected itself to taxation upon that portion of its capital so used, but nevertheless it remained a corporation which, so for as it exercised its legal powers, was ‘wholly engaged’ in manufacture, and, therefore, entitled to exemption as to its manufacturing business.’ ”

In the case under consideration the purchase and sale of books was within the corporate powers of the company. The business it did during the years in question of manufacturing, as well as of buying and selling foreign books, was authorized by its charter. Hence it was not, during said years, wholly engaged in the manufacturing business, and the comptroller did not err in imposing the tax of which relator complains. People ex rel. Western E. Co. v. Campbell, 145 N. Y. 587 ; 65 St. Rep. 526 .

It is claimed that the comptroller had no right to settle an account for taxes after the 15th day of January in the year when such taxes become due and payable. It is sufficient to say, in regard to this position, that the same claim was made in the Tiffany

p. 412

Case (see points of appellant, 144 N. Y. 168 ; 63 St. Eep. 44), and necessarily overruled by the decision in that case. See, also, People ex rel. Western E. Co. v . Campbell, 145 N. Y. 587 ; 65 St. Rep. 526 . In the case last cited Bartlett, J., in his opinion, says:

“It is the established rule, settled by repeated adjudications of the court, that the determination of the comptroller must stand upon the question of valuation, unless clearly shown to have been erroneous.”

Under the rule so stated we think relator did not show error on the part of the comptroller in the valuation made of its capital stock.

The determination of the comptroller should be confirmed, and the certiorari quashed, with $50 costs and disbursements.

MAYIIAM, P. J., concurs; HERRICK, J., dissents.

Cases cited

People ex rel. Tiffany & Co. v. Campbell 144 N. Y. 166 N.Y. 1894-12-11 p. 411
People ex rel. Western Electric Co. v. Campbell 145 N. Y. 587 N.Y. 1895-04-16 p. 411, p. 412