People ex rel. Pacific Mail Steamship Co. v. Commissioners of Taxes

Majority

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THE PEOPLE ex rel. THE PACIFIC MAIL STEAMSHIP COMPANY v. THE COMMISSIONERS OF TAXES OF THE CITY AND COUNTY OF NEW YORK.

Headnote

Certiorari—chap. 456 of 1857—assessment under—registration—vessels—legal situs of.

For the purposes of taxation under the act of 1857, the home port of a vessel is its legal situs. Under the act of 1857, chapter 456, the value of the capital stock of a company determines the amount of assessment, and not the locus or situs of the items of property owned by the corporation.

A writ of certiorari was issued in this case to bring before the court the proceedings of the tax commissioners in correcting their assessment upon the capital stock of the relator. The relator herein was assessed for personal property, for the year 1873, in the sum of $20,000,000—that being the nominal amount of their capital stock.

Application was made to the commissioners to have the assessment reduced to $1,736,371.99. The commissioners reduced it to $6,808,927, and refused to make any further reduction. The relator obtained and served a writ of certiorari, issued out of this court, to review the decision of the commissioners. On the return of the proceedings of the commissioners, after hearing counsel for the relator and respondents, it was ordered that it be referred back to the respondents to correct the assessment, by deducting therefrom such amount as they should determine to be the value of. the personal property of the relators situated out of this State.^[2] In pursuance of this order, a hearing was granted to the relators by the commissioners, on which it appeared that the company owned a large number of steamers, of which some were registered at the port of New York, and the residue were registered at the port of San Francisco. The commissioners decided that those registered at New York were, for the purposes of assessment and taxation, to be deemed within the State, and disallowed the deductions claimed for the value of the vessels so registered in New York, and corrected the previous assessment by reducing the same to the sum of

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$4,567,065. This writ of certiorari was issued for the purpose of reviewing the proceedings of the commissioners in making such amended assessment.

Coles Morris and Michael Cardozo, for the relators. .

James C. Carte?, for the respondents.

We think the proceedings of the commissioners should be affirmed, for the following reasons:

First. The relators are a corporation created by the laws of this State, and have their principal place of business in the city of New York. As a corporation, their residence is in New York. The ships included in the present assessment are registered in the port of New York, under and pursuant .to the United States Registry Act, and the city of New York is, therefore, their home port. They have, and can have, no other, and are not taxable elsewhere. Their situs is at the home port for all purposes of taxation. In the case of Morgam v. Parham,^[2] the Supreme Court of the United States have very emphatically settled these questions, and reaffirmed the case of Hays v. The Pacific Mail Steamship Company,^[1] under which the relators escaped taxation on these or similar vessels in California.

But it is insisted that under our statute the property of the relators, to be taxable, must bé physically ’witlvm the territory of the State, and therefore it is not enough that its legal situs and ownership are here. We think this position not sound for several reasons. Of course, ships at sea are not in a strict sense within the territory of the State in which they have their home port, but in legal contemplation they are themselves part of the territory (so to speak) of the country of which their owners are citizens or subjects, and they retain all the rights that flow from that fact while engaged in commerce between foreign ports for an undefined period, without any interval of return to the home port; But it is not, perhaps, upon this ground that they are deemed within this State when owned by citizens of the State, for the purposes of-taxation. It is

† † 17 Howard, 596 .

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rather because of the peculiar character of the property, which, though it be used abroad in the business of the owner, does not blend with the business and commerce of any foreign State or territory. The business of the relators’ ships in the Pacific is all the while a part of the business carried on in New York under the charter of the company, whence the general management and direction emanate, and to which point returns of all results are made. The ownership and the nature of the business control to establish the home port, where the corporation resides, as the situs of the ships themselves, and in legal contemplation we think the vessels used in the business, which have their home port, under the law, at New York, are within the jurisdiction and territory of the State, within the meaning of the general statute declaring what property is taxable.

But for the decision of the court when this case was before under consideration, we should deem this an immaterial, question.

The relators, under the statute of 1857,^[2] are taxable only upon their “capital stock” which is to be assessed at its actual value, with certain exceptions specially named dr referred to in the act. The subject of taxation under this act is the capital stock of the company, and that is, at all times, within the State, although, for the purpose of conducting the business of the company, a portion of its capital may be invested in ships whose commerce is carried on in remote parts of the world. The question to which the commissioners were to look, under the law, was not the locus or situs of items of property owned by the corporation, but of the company itself, and of its capital stock, and they were in New York, both in law and in fact. It would require a special exemption by statute to authorize the commissioners, in determining the actual value of the capital stock of the company, to strike out the value of property, used in the general business of the company, and contributory to the actual value of the capital stock, because its use was outside of the State, and the articles of property were, therefore, not territorially within the State. We think nothing of that kind was in contemplation under the act of 1857, which intended to create a special system of taxation applicable to corporations, and, sub modo,

* Chap. 456, Laws of 1857.

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to modify all previous general laws; but this is not, perhaps, an open question.

In respect to the money invested in building the ships in Delaware, nothing was shown before the determination to require them to treat the ships in process of building as the property of the company. Before the motion for rehearing, the commissioners had made and filed with the comptroller their certificate. The application for rehearing came too late; but if it did not, the refusal to rehear is not a subject of review on this application. The proceedings should be affirmed.

Daniels and Westbrook, JJ., concurred.

Proceedings affirmed.