
    The People ex rel. W. & J. Sloane, Resp’t, v. Edward P. Barker et al., as Commissioners, etc., App’lts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed March, 1894.)
    
    1. Taxes—Corporation.
    In ascertaining the assessed valuation of a corporation, “ the non-taxable assets ” are not to be deducted from the indebtedness of the corporation.
    3. Same—Vacation.
    The assessment upon corporate personal property must he vacated if, after deducting its non-assessable property and its assessed real estate from its gross assets, real and personal, its indebtedness exceeds the remainder.
    Appeal from an order of the special term, vacating an assessment for 1892 upon the relator’s personal property, valued at $902,631.53.
    
      George S. Coleman, for app’lts; Henry H Anderson, for resp’t.
   Follett, J.

W. & J. Sloane is a business corporation, organ- • ized in January, 1891, under the laws of New York, with a share capital of 3,000,000, all of which has been paid in and all of the shares issued. The principal office, or place for transacting the financial business of the corporation, is and has been kept at Nos. 880 and 888 Broadway.

In 1892, the deputy tax commissioner whose duty it was to value the corporation’s capital for taxation, valued it at $3,000,-000, which assessed valuation was entered in the books of the commissioners of taxes and assessments. Afterwards, and on the 18th of February, 1892, the corporation, by its treasurer, made, verified and filed with the commissioners the following statement:

“ Statement made and delivered to the commissioners of taxes and assessments of the city and county of New York, for and in behalf of the corporation of W. & J. Sloane, showing its condition for the purpose of assessment on the second Monday of January, 1892 :
Total gross assets on January 1.................$7,974,698.87
Capital stock actually paid in, or secured to be paid in............................ 3,000,000.00
Amount of surplus earnings................ 300,000.00
Bate of dividend of last year, or last annual dividend ...... 2.00
Indebtedness in detail as follows: Bonds, loans, bills payable and book accounts............ 5,556,118.00
Assessed value of real estate and ward map numbers): (describing particularly by ward
Ward. Map Nos.
5th. 354 to 356, 1732¿
Location.
Nos. 407 to 411 Greenwich st., and No. 15 Hubert street.
Assessed
Value.
$57,500.00'
Ward.
15th.
18th.
18th.
Map Nos.
1321 to 1323
335 to 339, 4264 to 4266, 4340 to 4344.
4344-J-, 4345.
Location.
Nos. 14 to 18 West 13th st.
Nos. 880 to 888 Broadway, 33 to 35 East 18th st., 28 to 34 E. 19 th st.
Nos. 36 to 38 E. 19th street
Assessed Valúa
37,500.00
500,000.00
40,000.00
$635,000.00
Amounts invested in the stocks of other corpora-
tions which are taxed upon their capital..... $610,875.00
Amount invested in IT. S. securities............. 400,000.00
Imported goods in unbroken packages.......... 1,006,310.00
Portion of capital invested in foreign countries and
in other states........................... 578,949.34
“ (If the stock of the company is worth less than par state the actual value, and give the facts under oath which will justify such estimate of its value.)
“The stock of the company has no market value, as no sales, have been made in open market, and it depends largely upon the personal skill and capacity of the managers.
“ The principal office, or the place of transacting the. financial business of the said corporation, is situated in the eighteenth ward of the of New at Nos. 880 to 888

After this statement was filed, and in February or March, 1892, the treasurer of the corporation was examined before the commissioners, pursuant to § 820 of the consolidation act, who thereafter made an assessment upon the following basis:

Corporation’s gross assets......................$7,974,698.87

Deductions allowed by commissioners:

Corporation had invested in shares of other corporations taxed on their capital.................

$610,875.00

Corporation had invested in U. S. securities..................;.

400,000.00

Value of goods imported by the corporation and on hand in unbroken packages.............

1,006,310.00

$2,017,185.00

$5,967,513.87

Indebtedness of corporation......$5,556,118.00

Less non-taxable assets (as above). 2,017,185.00

--$3,538,933.00

$2,418,580.87

Assessed value of corporation’s real estate................... $635,000.00

Corporation’s property outside of this state.................... 578,949.34

Surplus 10 per cent, on $3,000,000 300,000.00

- $1,513,949.34

Yalue of assessable personalty................ $904,631.53

The assessment was made for $902,631, an error of $2,000 having been made by the commissioners.

Upon what theory the commissioners deducted the sum of $2,-017,185, denominated by them “non-taxable assets” from the indebtedness of the corporation, is not apparent. This, in effect, was what was attempted to be done in People v. Ryan, 88 N. Y. 142, and was held to be illegal.

The commissioners should have made up their statement as follows:

dross assets of corporation, real and personal... $7,974,698.87

Investments in taxable shares of other corporations. Not assessable (chap. 456, L. 1857, § 3).. $610,875.00

Investments in U. S. securities. Not assessable (U. S. R., § 3701; People v. Commissioners, 90 N. Y. 63 ...................... 400,000,00

doods imported by corporation and held in unbroken packages. Not assessable (Brown v. Maryland, 12 Wheat., 419 ; Bur. tax, 86 ; Cool, tax, 61, et seq.)...... 1,006,310.00

Property outside of the state. Not assessable (People v. Commissioners, 23 N. Y., 224; Graham v. First Nat. Bank, 84 id., 303)... 578,949.34

Surplus on capital stock. Not assessable (chap. 456, L. 1857, § 3) 300,000.00

Assessed value of real estate to be deducted from gross assets (chap. 456, L. 1857, § 3)............ 635,000.00

$3,531,134.34

$4,443,564.53

Indebtedness of corporation to be deducted from taxable assets (People v. Barker, 141 N. Y., 146)

$5,556,118.00

$1,112,553.47

After deducting the non-assessable property of the corporation and its assessed real estate from its gross assets, real and personal, its indebtedness exceeds the remainder by $1,112,553.47, as appears by the foregoing statement.

The commissioners now seek to justify their action on the ground that the treasurer of the corporation, when examined before -them, declined to answer questions put by them to him. The difficulty with this position is that the record does not disclose the questions which the treasurer refused to answer, nor the subject to which they related. It does not appear that the questions related to the indebtedness of the corporation, and, for aught that appears, they may have related solely to the amount invested in United States securities, and further, the commissioners did not disallow any of the items of the statement made and filed, but found it to be true, and made their assessment on the basis of the truth of the statement. If, for example, the treasurer had refused to answer proper questions put by the commissioners in respect to the corporation’s indebtedness, or had given evasive or unsatisfactory answers, and the commissioners hhd found that the indebtedness was less than the amount stated, a different question would have been presented.

The order of the special term should be affirmed, without costs,

Van Brunt, P. J., and O’Brien, J., concurs.  