
    GEORGE W. McLEAN, as Receiver of Taxes, &c., Plaintiff v. SARAH L. MYERS, Defendant.
    
      Taxes—Bank stock held by non-residents—Receiver of taxes as to action by.
    
    Taxes assessed on stock in banks in the city of New York held by nonresidents, cannot be recovered by the receiver of taxes in the city of New York in an action in personam against the owner of the stock under the provisions of section 863 of the Consolidation Act. The only action which the receiver of taxes can maintain for such taxes is one in rem under the .provisions of Chapter 409, Laws 1882.
    Before Truax and O’Gorman, JJ.
    
      Decided November 3, 1890.
    Verdict for plaintiff subject to the opinion of the general term. The facts sufficiently appear in the opinion.
    
      William H. Clarlt, counsel to the corporation, and George S. Coleman of counsel, for plaintiff, argued:
    The plaintiff as receiver of taxes in the city of New York is authorized by law to recover from defendant in this action the amount of the taxes claimed with interest. No question is raised as to the validity of the assessments or taxes, but the contention on behalf of defendant is that the plaintiff has no right to. recover in this action. The assessment of 1882 was made pursuant to the provisions of § 4, chapter 477 of the Laws of 1881, “ An Act to provide for the taxation of banks and of moneyed capital engaged in the business of banking, receiving deposits or otherwise.” The assessment of 1883 was made pursuant to § 312 of chapter XII. of chapter 409, Laws of 1882, “ An Act to revise the statutes of this state relating to banks, banking and trust companies.” The provisions of these acts, so far as the assessments in question are concerned, are identical! §§ 4, 312. “ The stockholders in every bank or banking association organized under the authority of this state, or of the United States, shall be assessed and taxed on the value of their shares of stock therein ; said shares shall be included in the valuation of the personal property of such stockholders in the assessment of taxes at the place, city, town or ward where such bank or banking association is located, and not elsewhere whether the said stockholders reside in said place, city, town or ward or not, but, in the assessment of said shares, each stockholder shall be allowed all the deduction and exceptions allowed by law in assessing the value of other taxable personal property owned by individual citizens of this state, and the assessment and taxation shall not be at a greater rate than is made or assessed upon other moneyed capital in the hands of individual citizens of this state.” The authority under which the plaintiff proceeds in the present case is found in § 863 of the Consolidation Act, which is a re-enactment in express terms § II of chapter 334, Laws 1867 ; and is as follows : “ Any tax duly imposed for personal property upon any person or corporation in the city and county of New York, and which shall remain unpaid and in arrear on the fifteenth day of January succeeding the year in which it shall have been imposed, may be recovered with interest and costs, by the receiver of taxes of said city, in an action in any court of record in this state.” The plaintiff submits that the taxes in suit were duly imposed for personal property upon the defendant, and were so imposed in the city and county of New York, and remained unpaid at the time when this action was commenced. While conceding these facts, the defendant claims that the authority of the receiver of taxes to recover by suit is limited to the recovery of taxes imposed on a person or corporation residing in the city ánd county of New York at the time the assessment is made, and does not extend to the case of a person residing in another county of the state. In support of this contention, reference was made on the argument below to the provisions of § 6 of chapter 477 of the Laws of 1881, and § 314 of chapter 409- of the Laws of 1882, as follows : §§ 6, 314. “ When the owner of stock in any bank or banking association organized under the laws of this state, or of the United State, shall not reside at the same place where the bank or banking association- is located, the collector and county treasurer, shall, respectively, have the same powers as to collecting the tax to be assessed by this act as they have by law when the person assessed has removed from the town, ward or county in which the -assessment was made, and the county treasurer, receiver of taxes, or other officer authorized to receive such tax from the collector, may all or either of them, have an action to collect the tax from the avails of the sale of his, her or their shares of stock, and the tax on the share or shares of said stock shall be and remain a lien therein from the day when the property is by law assessed till the payment of said tax, and if transferred after such day, the transfer shall be subject to such lien. The suggestion is, that since provision has been made for collecting the tax of delinquent non-residents from the sale of their stock, no other remedy is available. To this it may be answered (1.) That the provisions of the general acts referred to were not intended to apply to the city and county of New York. The terms “ collector ” and “ county treasurer ” are appropriate to the other counties of the state, but not to New York county. As long ago as 1843, by chapter 230 of the Laws of that year, the office of collector of taxes in the city of New York was abolished, and the appointment of a receiver of taxes was directed. The “ receiver of taxes” referred to in the (sections last quoted, is the officer of that designation in other counties, where the office of collector of taxes also exists. In the city of New York the receiver of taxes does not receive the revenues from any “ collector.” An instance of the application of the words “ collector ” and “ receiver of taxes” to counties other than New York, may be found in chapter 10, Laws of 1885. (2.) Even if the provisions of sections 6 and 314 were of general application, they are not inconsistent with the special authority conferred upon the plaintiff by § 863 of the Consolidation Act, to recover any tax duly imposed, &c., “ in an action in any court of record in this state.”
    The system of taxation in New York county is in many particulars different from the system prevailing elsewhere throughout the state. It was doubtless recognized by the legislature that many persons residing outside of our city limits would be liable to taxation here by reason of their holding of bank stock. New York city being the financial centre of the state, and of the entire country, would naturally attract investors to its moneyed institutions ; and unless a simple and effectual remedy by action against the person were provided to the local receiver of taxes, the city of New York might be practically unable to collect a large portion of its revenues. It was, therefore, wise and proper that special provision should be made for the metropolis. In support of the defendant’s position that the plaintiff had no such authority as he claimed under §863 of the Consolidation Act it was urged, on the oral argument, that the provision of the Consolidation Act was merely an embodiment of § 11 of chapter 334 of the Laws of 1867, and that at the time the Act of 1867 was passed there was no provision for collecting taxes due from stockholders of banks by the sale of their stock, as now provided by law. A reference to chapter 761 of the laws of 1866, “ An Act authorizing the taxation of stockholders of banks, and the surplus funds of savings banks,” will show that the argument was not well founded. Section 5 of that Act is, with a few trifling verbal differences, identical with sections 6 and 314 last above quoted, and is the source oh these later sections.. The legislature, in giving to the receiver of taxes of New York the ample power conferred by § 11 of chapter 334 of the Laws of 1867, must be presumed to have had in mind the Act of the previous year. If they had intended to restrict the authority to recover by action to taxes on personal property other than bank stock, it would have been a simple matter to insert the proper qualification.
    
      Stimson & Williams, attorneys, and E. P. Johnson of counsel, for defendant, argued :
    I. The defendant, being a non-resident and living in Westchester county, was liable to be taxed there for all her personal property except stock in banks elsewhere located ; and, as to her bank stock in New York city, a levy could be made according to law, and the tax could have been and should have been collected under the provisions of the banking laws. Laws of 1866, chap. 761 ; Laws of 1881, chap. 477 ; Laws of 1882, chap. 409 ; Laws of 1836, chap. 461.
    II. Section 863 of the Consolidation Act does not by its terms confer upon the receiver any right of action against a non-resident of the city and county of New York. It is a re-enactment verbatim of section 11 of chapter 334 of the Laws of 1867. This was entitled “ An Act in relation to the collection of arrears of personal taxes in the city of New York.” Its primary object was to create the office of the attorney for the collection of personal taxes, and to prescribe his duties, and it related solely to the city of New York. This ease is distinctly excluded by the language and construction of the section. It provides for the collection, by action of any tax imposed for personal property upon any person in the city and county of New York. This is the rational and grammatical interpretation. Had the legislature intended to provide for the collection of any tax imposed in the city and county of New York, without reference to the residence of the person, they would have said so. A simple transposition of the sentence would have effected this object. They have not done so, and the court should take and construe the section as it stands. The effect of the section being to take away the property of the individual by an exercise of paramount power, it should not be astutely extended beyond its natural import and the necessity of the case. No such necessity exists. Up to 1866, it is believed, no personal tax, or tax for personal property, .could be imposed, except upon a resident of the county, town or ward where the tax was imposed. 1 R. S., 389, § 5. Stockholders in banks were not taxed as individuals, but the bank itself was taxed on its capital stock, 1 R. S., 388, § 7 ; Laws of 1863, chap. 240 ; 40 Barb. 334. By chap. 761 of the Laws of 1866, a change was made, and the shareholders were taxed personally upon the stock held by them, and the bank was discharged. At the same time a new principle was introduced into the system of taxation, and the stock was made taxable at the place where the bank was located, whether the stockholder resided there or not. To meet this condition special and stringent remedies and methods for the collection of that particular tax were provided, and in particular for the collection of the tax where the shareholder was a non-resident. These provisions were re-enacted in 1880, in 1881, (chap. 477), and in the act to revise the banking laws (chap. 409 of 1882), and are now the law. Since the right of action conferred as above upon the county treasurer, receiver of taxes, etc., applies only in cases where the shareholder is a non-resident, while resident owners are left subject to the' operation of the general law,' it must be presumed that it was not the legislative intent to extend the operation of any general law to the case of non-resident shareholders in banks. People v. Dolan, 36 N. Y. 59.
    III. The only statute, other than § 863 of the Consolidation Act, which can be assumed to confer upon the receiver of taxes the right to bring an action at law in such a case as this, so far as we are aware, is the Act of 1866, above cited, and re-enacted in chap. 409' of the Laws of 1882. By § 314 of the last-mentioned act, when the owner of stock in any bank does not reside in the place where the bank is located, the receiver of taxes may have an action to collect the tax" from the avails óf the sale of his stock. This is no such action. It does not appear whether or not the stock is still in the possession of the defendant. No judgment of sale is demanded. No “ avails” are sought to be obtained, or when obtained to be subjected to the operation of the judgment. The judgment sought in this action is an ordinary money judgment, enforceable by execution out of any property of the defendant, real or personal.
    IV. The court will observe that at the time of the passage of the Act of 1866 no provision whatever existed conferring upon the receiver of taxes in New York city any rights of action. His office was created in 1843, but it was not until the passage of chap. 334 of the Laws of 1867 that he was authorized to bring action's at law. The Act of 1866 (chap. 761) created a new right. It taxed property never taxed before (People v. Dolan, 36 N. Y. 59), and provided new and special remedies for the enforcement of that right. Under such circumstances it is well settled that the remedies so provided are exclusive. Wood v. Supervisors of Monroe Co., 50 Hun, 6 ; Dudley v. Mayhew, 3 Comstock, 1. The tax on bank stock is in the nature of a tax in rem. It is like a real estate tax, and the property is liable in the first instance certainly, if not, as we contend, exclusively. Undoubtedly the receiver might have brought his action under the statute, and compelled a sale of the stock and the application of the proceeds. He might have resorted to the dividends, or enforced his lien as the statute prescribes. But it is too late now, after the lapse of nearly six years, and after the defendant may have parted with the stock to prosecute her generally for the amount of the tax, and charge her with interest and costs.
   By the Cotjbt.—O’Gobman; J.

The contention on this appeal arises from the following facts, which are admitted. The defendant was assessed in the city and county of New York, in 1882 and 1883, on certain stock in the Broadway National Bank standing in her name. She has always been and is a resident of Westchester county. The proceedings by which the tax was imposed were all regular, and a warrant for the collection of the tax was delivered in due form to the plaintiff, who is receiver of taxes in the city of New York. The tax has never been paid by defendant. It does not appear that any warrant to collect it has ever been issued to any marshal, or returned, or that there has ever been any attempt to levy it by distress and sale. The plaintiff, as receiver of taxes in the city of New York, now brings this action against the defendant and demands a money judgment for the amount of the tax and interest.

With the assent of counsel, the court directed a verdict for the plaintiff, subject to the opinion of the court at general term.

The receiver of taxes is an officer of the law and has no powers other than such as are expressly or by necessary implication conferred on him by the law. As a condition precedent to the right of the receiver of taxes to maintain any action for the collection of personal taxes under the provisions of § 863 of the Consolidation Act of 1882, it must appear that the case is one which by statute the receiver is authorized to send to the attorney for the collection of personal taxes for prosecution. These cases are ; (1.) “ All cases of personal taxes embraced in the assessment rolls when the assessment is $1,000 or more, and upon which a warrant to any of the marshals of said city and county has been issued and unsatisfied for a period of sixty days, or returned unsatisfied in whole or in part; ” and (2.) “All other cases of personal taxes when application to any court may be made for the collection of the tax." Consolidation Act, § 859.

The cases where application to any court may be made for collection of a tax, are those mentioned in section 857 of that act, and there is no evidence that any of the events have occurred in this case justifying the receiver of taxes in bringing this action against the defendant, lb. § 857.

Section 863 of the Consolidation Act provides for the collection by action, of any tax imposed for personal property upon any person in the city and county of New York. It is contended by the plaintiff here, that the true meaning of this clause is to be arrived at by construing it as if it had been written thus—“ for the collection of any tax imposed in the city and county of New York upon any person,” &c.

I do not think that we are justified in taking this liberty with the text of the law, especially as there is no necessity to resort to such a process. The law has made ample provision for the collection of taxes on bank stock no matter where the owner may reside.

By chapter 761, Laws of 1866, the stock was made taxable at the place where the bank was located, and special remedies were provided for the collection of that tax where the stockholder was a non-resident. First :—In case of non-residence, the collector and county treasurer may proceed against the person taxed, in the same manner as where a personal tax has been assessed upon a person who has subsequently removed from the town or ward where the assessment is laid, namely : by issuing a warrant to any sheriff or constable of the county to which the person has removed (Laws of 1836, chapter 461). Second :—And, this also in case of non-residence the county treasurer or receiver of taxes, may have an action to collect the tax “ from the avails of the sale of the stock.” Third :—The tax is made a lien upon the stock from the day it is assessed, until payment is made, and all transfers are subject to such lien. Fourth :—It is made the duty of the bank and of its officers to retain so much of any dividends declared upon the stock as will suffice to pay the tax, until the tax is paid. These provisions were re-enacted in 1880, in 1881 (chap. 477), and in the act to revise the banking laws (chap. 409 of the Laws of 1882), and are now the law.

By § 314 of chap. 409 of the Laws of 1882, the receiver of taxes may have an action to “ collect the tax from the avails of the sale of his (the owner’s) stock,” in cases where he does not reside in the place where the bank is located. This act, I think, is broad enough in its language to cover such transactions in the city of New York. The action now under consideration is not brought under or in compliance with this act. It is not an action in rem, for the purpose of procuring a sale of the stock, but an ordinary action, in personam, for a money judgment. It is not even alleged here that the bank stock is now in the possession of the defendant, and, as to the taxes of 1883, it would appear that the defendant was, in fact, not a stockholder when these taxes were imposed..

In my opinion this action, on the part of the plaintiff, cannot be sustained. The verdict for the plaintiff should be set aside, and the defendant should have judgment, with costs.

Truax, J., concurred.  