
    The People of the State of New York, Plaintiff, v. Duffy-McInnerney Company, Defendant.
    Third Department,
    November 13, 1907.
    Tax — original issue of stock not taxable.
    Chapter 341 of the Laws of 1905, as amended, imposing a tax on “sales * * * or transfers of shares or certificates of stock in any domestic or foreign association ’’ does not impose a tax on the original issuance of said stock.
    A statute imposing a tax on property must be strictly construed.
    The words “sale” or “transfer” cannot except by forced interpretation be held to include the original issuance of certificates. "
    ■ - Submission óf a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.
    
      William S. Jackson, Attorney-General [Timothy J. Dillon of counsel], for the State.
    
      James Break Perkins, for the defendant.
   Smith, P. J.

The defendant is a- domestic corporation, organized to carry on business in Rochester, N. Y., as a department store. It was incorporated on November 14,1906 ; its capital stock is $2,000,000. The entire amount of stock was subscribed and paid in on the- 1st of April, 1907. The capital having been paid in full, the company issued to the subscribers certificates for the amounts to which they were entitled, amounting in all to 20,000 shares. Ho stamps were attached tó the stock thus' issued. If the issuance of this stock be subject to the tax under chapter 241 of the Laws of 1905 the tax would amount to the sum. of $400. The question here for decision is whether the original issuance of this stock is a transfer under the terms of the act rendering it subject to taxation.

This chapter was amended by chapter 414 of' the Laws of 1906. The amendment was, however, not in any matter material to this controversy. The law reads: “ There is hereby imposed and there shall immediately accrue and be collected a tax as herein provided’ on all sales, or agreements to sell, or memoranda of sales or deliveries or transfers of shares or certificates of stock'in any domestic or foreign association * * * whether made upon or shown by the books of the association, company or corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memorandum or other evidence of transfer or sale,” etc. The Attorney-General contends that the original issuance of' stock is a transfer within the meaning of this act, and that the certificates of stock thus issued are required to have upon them the stamps specified in the act. With this contention we are unable to agree. Authority is not needed to the proposition that a tax will not be held to be imposed upon property, except by language clearly indicating the intent of the Legislature to render the same subject to the tax. The language used in this section would seem fairly to exclude the original issuance of the stock, by the use of the words “transfer” and “sale” and the failure to specify that the tax should be imposed upon the issuance of the certificates. A.salé or a transfer cannot, except by forced interpretation, be. held to include an original issuance of certificates, which .are simply evidence of the interest of the subscribers in the corporation. Until those certificates are once issued they cannot be made the subject of such sale or transfer as to bring them within the provisions of the act requiring them to pay the tax.

It is argued that the statute refers to instances where the transfer is indicated simply upon the books of the company, and not by the transfer of certificates already in existence, and that it was intended thereby to include the original issuance of the stock. But it is not infrequent that corporations exist without the issuance of stock, and without any paper showing the interest of the subscribers, other than a minute thereof upon the books of the company. It is clear, to my mind, that this part of the section refers to those cases where the stockholder, without his certificate of stock, is transferring or selling his right in the corporation to another party, where the only evidence of such transfer appears upon the books of the company.

Judgment should, therefore, be entered in favor of the defendant, with costs.

All concurred.

• Judgment directed in favor of defendant, with costs. 
      
       Adding to Tax Law (Laws of 1896, chap. 908) § 315 et seq.— [Ref.
     