The New York herald., 1875-07-20

zens or aliens "a statutes az Large, 1897. Two
railroad companes-to wit, the New iork ~ central
aud the Hudson River each created and exisnng
ny the laws OF the State of New YORK, on tue lst
day OF November, 1889, became consonaated as
authorized by the law Of the state, ana the Two
companies were ever thereafter ana stu are
known ls the New York Central and hadson IIVer
Railroad Company. by the record IL also appears
that the consolidated company own, operate and
malntaIa their railroad from tne me- Guy ana nd
Nagara YORK Fans 80 1a' @ ,bey Gr Da1 Save their
principal ONCE in the city OF Albany WITHIN tnS
Fourteenth collection district of the state that IN
and by he act oil consolidation the rights Oh az
creditors and all liens upon the property OF elther
OF the corporations were preserved unlmpalredI
and that the respective corporations were deemed
to continue IN existence To preserve the same,
and that all debts or liabilities incurred by elLber
OF the corporations, except mortgages, shall
thencefortn attach TO the new corporation anu
may be enforced against the same ana lneF
property to the same extent as II the deots or
liabilities had been incurred or contracted DY
sucn new company. Prior to that time
too wit, on the lsth Of DECEMBER;
1868, the New York Central Railroad
Company ascertaned and determ ned that they
had expended moneys OF the earnings OF the COM
pany equal Ia amount TO eighty per cent OF Jne
capital stock, for the purpose OF constructing ana
equippug their railroad, and IN the purchase OF
the increase OF their tratc; and In order that the
stockholders might have evidence of such expen-
dlture and be entitled to reimbursement ei the
same at some convenient future period, they dt-
rected that certificate, signed by the President
ana Treasurer Of lhe company, ana issued 10 the
stockholders seVerallY, declaring that sucn stock
holder Is entitled 10 eighty per cent OF the amount
OF the capital stock held by him. payable
ratabily with the other certificates issued
uQoer the same resolution, at the optlon OF the
company, out OF their future earnings. with divl-
dends thereon, at the sans rates and times as
dvdends shall be paid ON the shares OF the capital
STOCK OF the comp my, and that such cernncates
may be, at the option OF the company, converted
lnto stock whenever the company snall be author
iZed 70 increase its capital STOCK TO an amount
sufficient Tor such conversion. Certlhcates OF the
klnd were accordingly issued anu delivered 10 the
stocGholders. seyeraliy entl led "ntercst certin-
cafes" and each "ceruhes that -, being
the holder OF - shares Of the capital stock
dollars, payable ratabiy with other certl1.
Gates issued under the same resolution, at
the pleasure Of The company, out OF their uture
earnings, with divldenus thereon n the same
rates and times as divdends shau be paid upon
the snares OF the capital stock OF the company.n
Annexed thereto is also a memorandum tnat the
certificate may DC transferred on the DOCKS OF the
company. and bank form Tor such transfer Is
also appended, as more Iuly set lorln IN the
record.
Pursuant TO the act or Congress- the assessor OF
the proper district assessed against the pfesl-
dent, dlrec ors and company OF the New YORK
Central Railroad the following taxes, TO witt
Capital stock December ~ 1868 .s2s 795OOl
eighy per cent OF capital STOCK ..-,...... ZO3oNOO
Tax the at i've per cent........... $40
Penalty .......... l0JO
Total 81 l52, 800
considerable delay ensHed before any measures
adopted to collect the TAX, and tue 24tn OF
February 1872 the Commissioner informed the
assessor Oh the district that on appeal TO him he
mad come TO the conclusion tnaJ tue company was
liable TO pay tax Of hve per cent without pen
ally OF sIX-nlteenths OF the entire dividend, which
reduces tue assessment to the sum Of s460 720 and
tnat mad Instructed the collector to collect that
amount, addlng tnat on the payment and the
presentation OF proper vouchers, the remainder
OF the assessment, TO w.t. S69Z, $50, In
Guiding the $1,000 penalty would be
abated. Part OF the reduced assessment
was collected from tie proceeds of the sales OF
property belonging to the company, and the resi-
Que was PAID by tile company, under protest.
Payment OF the reduced assessment having been
made Uy utstralnt, or under protest, the plaiutln
brought SUIT against the collector in the state
Court TO recover back the amount, ana the suit,
on motion OF the defendant, was duly removed
into the Circuit Court OF the Unted States Tor
peared and pleaded the general issue, and upon
tnat issue tae parties went TO trial. and The veroct
and judgment were lor the plaintiffs lor the whole
a cunt claimed, with interest ana costs Of SUIT
amounting to S60V, 9Sl ~. Exceptions were fled
BY the defendant, and lie served out VIII OF
error and removed The cause into this Couit T..
Since tue case was entered mere the defendant
has fled the following assignment OF errors:-
First-rhat the Circuit Court erred in excluding the
reports offered by the defendant Tor the purpose OF
showing that the interest certificates equenty
merged in the capital stock OF the plaintiff corporation
SecoHd-Ihat the Circuit Court erred IN lnsIuctEg
the jury thai the OF the company, evidenced
by the resolution The cercates issued to the
holders not declaration of dividend scrip
wi ohm the meaning OF the internal revenue then III
force.
Thrd-That the Circuit Court erred in instructng the
jury render a verdict tor the plainGh the
of the they paid to the defendant
The Court sustained these arguments OF error
IN long oplElon, and reversed the Judgment.