
    The People ex rel. Frederic Hoffman Smith, Jr., v. Frank A. O’Donnell et al., as Commissioners of Taxes and Assessments of the City of New York.
    (Supreme Court, New York Special Term,
    March, 1905.)
    Taxation—Property of nonresident — Deduction of debts.
    An assessment upon the amount invested by a resident of New Jersey as special capital in a limited partnership, a firm of stock brokers doing business in the city of New York, is not subject to the indebtedness of said nonresident unless it stands in some direct relation to the investment.
    An allegation in a petition for a certiorari to review such assessment, that the indebtedness of the relator which he seeks to have deducted, was incurred in due course of business, does not show that it stands in some direct relation to his investment and may not be deducted.
    While the tax commissioners’ refusal to swear the relator in support of his application to revise the assessment warranted him in suing out a writ of certiorari his petition therefor must allege facts, showing a prima facie case for cancellation or revision.
    On the second Monday of January, 1904, the relator, a resident of Hewark, H. J., had invested in the limited partnership of Harrison & Smith, a firm of Hew-York stock brokers, the sum of $100,000, as special capital. The commissioners of taxes and assessments assessed the entire amount of this special capital as capital invested in business in the city of New York by a nonresident. Relator sought to deduct indebtedness of $25,000 upon open accounts and $50,000 upon notes upon the ground that all of said indebtedness was to citizens of the State of New York and incurred in the usual and due course of business and not for the purpose of evading taxation under the laws of the State of New York. The petition of the relator also alleged that on the second Monday of January he had no other personal property subject to taxation either within or without the State of New York, excepting the amount of said special capital and $1,925 in cash deposited in a bank in the city of New York. A motion was made to quash or supersede the writ of certiorari granted upon said petition upon the ground that the petition failed to show that the assessment was illegal.
    John J. Delany, corporation counsel (George S. Coleman and E. Crosby Kindleberger, of counsel), for motion.
    Hoge & Humphrey (Theo. F. Humphrey, of counsel), for relator.
   Leventritt, J.

The motion to quash must be granted as the relator does not bring himself within the controlling authority of People ex rel. Hecker-Jones-Jewell Milling Co. v. Barker, 147 N. Y. 31, by showing that the debts he seeks to deduct from his investment as a special partner were incurred in relation to that investment. Whatever may be the dicta in the two cases of People ex rel. Barney v. Barker (16 App. Div. 266, affd., 154 N. Y. 762; 35 App. Div. 486, affd., 159 N. Y. 569), the decisions are both founded on the Hecker-Jones-Jew ell case, and if in conflict, the dicta must yield to what has actually been decided. The argument seems most persuasive that where a tax is not against a nonresident as such, hut merely against the property located here enjoying the protection of our laws, a tax which is not collectible by suit against the nonresident (People ex rel. Dufour v. Wells, 85 App. Div. 440, affd., 177 N. Y. 586; City of New York v. McLean, 170 N. Y. 374), but merely out of the property, that the debts of the nonresident should not be allowed to diminish the taxable fund unless they stand in some direct relation to it. The allegation in the petition that the debts were incurred in the due course of business does not show such a relation, as a special partner’s capital is unaffected by firm debts (People ex rel. Bird v. Barker, 145 N. Y. 239). Nor can the relator invoke the right to take further testimony. The commissioners’ refusal to swear him in support of his application to revise the assessment warranted his securing a day in court by suing out a writ of. certiorari (People ex rel. Thomson v. Feitner, 168 N. Y. 441, 456), but the petition on which he then comes into court must set forth sufficient facts to show a prima facie case for cancellation or revision. This the present petition does not do.

Motion granted, with ten dollars costs.  