
    The People ex rel. Glens Falls Insurance Company v. Henry Ferguson et al., Assessors of Queensbury.
    Assessment of taxes; surplus of insurance companies; contingent LIABILITY OF INSURANCE COMPANIES AS AFFECTING ACTUAL OR assessible value. It is the duty of assessors to estimate the contingent liability of an insurance company upon outstanding policies of insurance in force, by the usual rules for determining such liability, and to deduct the assessment so found, in making their assessment of the company, for the purpose of taxation.
    This was a common law certiorari to review the action of the assessors of the town of Qneensbury, and compel them to strike from the assessment roll of said town for 1866, an assessment for personal property, and an entry on the assessment roll of personal property erroneously omitted in 1865. Instead of a return, the case has been argued upon a statement agreed upon as the facts, with a stipulation for the entry of judgment.
    The case presents two questions for consideration: First, was the entry on the assessment roll of $30,000 as for personal property alleged to have been erroneously omitted from the roll of 1865 authorized ? Second, was the assessment for $40,000, as for personal property, legal ? The first question was decided in favor of the relators, by the General Term, and, as.no appeal is taken from that decision by the assessors, the point does not arise in this court, and the statement of facts respecting the same is omitted here.
    Upon the liability of the relator to an assessment of $40,000 for personal property, the facts are these: The capital of the corporation is $100,000, all of which is paid ■in, and its surplus profits is $141,932.55; making, in all, $241,932.55.
    Its assets are the following:
    U. S. securities,..................:........ $160,400 00
    Bonds and mortgages,..................... 36,305 56
    Hew York bounty loan,.................... 3,000 00
    
      198 shares bank stock,..................... $9)900 00
    Cash on hand and in bank,.................. 19,575 59
    Due from agents,.......................... ' 7,251 40
    Beal estate, office, etc.,..................... 5,500 00
    $241,932 55
    Of these the following are exempt from taxation or are
    otherwise taxed, viz.: ■
    U. S. securities,........................... $160,400 00
    Bank stock,........................ 9,900 00
    Beal estate, office, etc.,................... 5,500 00.
    And the following items are to be deducted, viz.:
    Losses unpaid,............................ 9,642 00
    10 per cent on its capital,............ 10,000 00
    $195,442 00
    Leaving, after these deductions,......... $46,490 55
    It further appeared, that there were outstanding policies of insurance in full force, exceeding in amount $22,000,000, on which the premiums had been received and included in the assets of the company, and that it would cost $80,000 to . re-insure such outstanding risks. It was also shown, that said corporation made a dividend of ten per cent last Jann- ■ ary, which was the first dividend it had ever made; that there had been some sales of its stock just prior to such dividend at ten or twelve per cent premium, which was the highest price ever paid for said stock, or for which it had ever sold; that since said dividend there had been several sales, but none at a higher price than par value, together with interest added from date of dividend to time of sale.
    The assessors refused to make any allowance on this account, but assessed the company upon the sum of $40,000. Upon appeal to the General Term of the fourth district, this decision was affirmed, and the. relator now appeals to this court.
    
      
      S. Brown, for the appellant.
    
      J. Mott, for the respondent.
   Hunt, Ch. J.

Prior to the year 1853, moneyed, corporations were assessed upon the amount of their nominal capital, whether its value in fact was more or less than its nominal amount. (People v. Dolan, 36 N. Y. 62.) In that year, and-again in 1857 (Laws 1857, 2d vol. p. 1), the statute was amended so that the assessment was made upon the capital stock and its surplus profit exceeding ten per cent “ at its actual value.” The principle of assessing upon the actual value of the stock, instead of its nominal amount, was then introduced. (Authorities, supra.)

The rule of assessing individuals upon their personal property is expressed in different language. It is in these words: The full value of all the taxable personal property owned by such person, after deducting the just debts owing by him.” (1 B. S. 391.) The assessors and the General Term held, that these two provisions furnished, substantially, the same rule. They held, that the contingent liability of the company was not a debt owing by it, and that no deduction could, therefore, be made from the assessment on that account. I agree, that this- liability was not a debt owing by the company, and that, if the same facts had been presented in behalf of an individual,..he would not have been entitled to the deduction now claimed. If it is a debt, to whom is it owing ? If a debt, what is its amount in figures, and upon what policy has it accrued ? It is impossible to answer these questions, because, in fact, there is no present debt to any one.

I do not, however, agree in the conclusion of the Supreme Court, that therefore there can be no deduction on account of this circumstance. These questions are pertinent and conclusive in the case of an individual. He is entitled to deduct only the “just debts owing by him.” As to him, there must be a .creditor to whom the debt is owing, an amount certain or capable of being reduced to certainty, and a contract or judgment upon which a debt arises. Not so, however, as to a corporation like that in question. The rule of assessment, then, is “ the actual value ” of the capital. If a corporation, or an individual, has an actual estate in possession of $100,000, and is liable as guarantor, or indemnitor, or indorser, or bail, for $50,000, and the principal in all these liabilities is insolvent, so that he wifi certainly have to pay the $50,000, is not the actual value of his estate reduced by that amount ? True, he cannot be said to owe that amount until the lapse of time, or a notice of nonpayment, or some other occurrence, will entitle some other party to commence an action against him. His actual estate, however, is reduced in value by just that amount. No assessor or individual could justly say, that “the actual value” of his estate, subject to these contingencies, was as great as it would be if free and clear from them. No man would , give him as much for his estate, subject to these claims, as if there were no such claims. Whether tested by the standard of market or selling value, or by what it will ultimately produce to the possessor, the contingent liabilities work a reduction of value. (Oswego Starch Co. v. Dolloway, 21 N. Y. 458.) I think it was an error in the assessors to refuse to make these deductions. There was no practical difficulty in reaching a result by the aid of authentic tables, and by such evidence as long established insurance companies can readily furnish. It was the duty of the assessors to act upon the evidence before them, and to adjudge how much the actual value of the stock was reduced by these contingent liabilities, and. to deduct from the assessment accordingly. The evidence, as presented, showed, that the reduction would, more than equal the surplus as found by the assessors, and there was nothing in contradiction or disparagement of this evidence. Their action is judicial, and to be governed by the evidence before them. All the evidence before them in the present case showed, that there was a contingent liability sufficient to absorb all their surplus, and I see nothing to cast doubt or suspicion upon it. The assessors should have decided in accordance with the evidence. (People v. Reddy, 43 Barb. 543; Oswego Starch Co. v. Dolloway, 21 N. Y. 460.) There is nothing in the case to indicate, that the roll is not still in the hands of the assessors, and that they may yet correct their error by striking out the assessment of §40,000 for the year 1866. The judgment should be reversed, and the assessors ordered to correct the roll by striking out said sum of §40,000, assessed to the appellants for the year 1866.

Judgment reversed, and order entered to strike out.  