New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1900-01-11
NEUTRALITY-SUSPICIOUS.
DECISION OF COURT OF APPEALS IN A
CASE INTERESTING CORPORATIONS.

KINGSTON ASSESSMENT OF PERSONAL PROPERTY
OF CORNELL. STEAMBOAT COMPANY REDUCED.
Albany. Jan. 10 (speciaD-The Court of Appeals
yesterday gave an opinion in a case which throws
considerable light on the judgment held by the
members of that court on the changes IN the tax
alton laws OF the State made by the Francnlse ak
act of 1899. The State Tax Commissioners hedIu Vi
the decision with a great deal - interest Proml-
nent corporations were so rllEPi concerned about
the case that Charles A. Collin, OF Sheehan q
Collin attorneys for the Brooklyn Rapid transit
Company may be said have volunteered 10
add his argument to that Of the counsel OF the
corporation affected. the Cornell Steamboat COM
pany before the Court of Appeals.
The decision was on an appeal from an oroer Oh
the Appellate Division of the Supreme Court Ihlrd
Department, affirming an order of the speciai
Term striking the of S25O.OOO of the personal
nropertv of the Cornell Steamboat Company from
the assessment roll of the city of Kingston Tor the
wear 1893 In that year Kingston assessed the Cor
nell Steamboat Company for personal property TO
the amount Of $3.50 900 in addition to its real estate
The comnanv admitted having property to the
value of 1890, 753 IA, but claimed that mortgage
indebtedness of 100000 should be considered ana
other indebtedness and therefore it had an actual
deficiency of $54 74S 3d. 1t also appeared that the
capital stock of the corporation was SI5O'OOO ana
that out of the earnings of the company an annual
dividend was paid of per cent its capital stock
together with the interest its bonded indebted
ness II also appeared that in 1898 the relator pr-
chased the boats franchise ana business OF an
other company, for which 1t paid 100000, and at
that time increased it's mortgage Indebtedness from
$500 600 to $700.0O0
with reference to this transaction the president
of the company testified that he regarded the fran
chise and business worth more than the boats;
that he did not regard the franchise given to a
steamboat company by the State of any value
whatever except form in which to do bust
ness that it did not convey exclusive privilege.
as in the case of a railroad, but simply permitted
~ i'm hyyE ubiR cOlld a.
gether and do business under a State law, and in
stating the value of the franchise purchased he
wished it to be understood that he regarded it as
depending solely on the goodwill of the business
concern purchased.
Judge Haight who writes the opinion of the
Court of Appeals says it is commended behalf Of
the assessor that in making the assessment for
personal property he had the right to assume from
the fact that the company paid dividend annually
of per cent it's capital stock remained unim-
paired. 1T must be conceded" says Judge Haight.
that the assessor had the right to avail himself
of such assumption in determining the amount
question has arisen as TO whether there is any
authority in law for deduction of the debts of a
town, County and municipal purposes On this
question able briefs have been submitted by coun-
sci, in which is disclosed history of tax laws
from the beginning OF the nineteenth century. We
tended review of former statutes for to our minds
the answer that should be given to the question
be conceded that the Tax Law of 1896 does not in
express terms direct the deduction OF the debts of
corporations in assessing their personal property,
but that such deduction was intended by the
Legislature have reasonable doubt. Under
prior laws they were deductible as this Court has
repeatedly. held. Reading the Statutory Construc-
tion Law in connection with Sections Il q and 81
of the Tax Law. we find that the statute affords
a simple method for the taxation of corporations,
well individuals providing for deduction of
the debts that are owing by either
The decision sets forth that the bonded indebt-
edness Of the company was increased in 1893 from
100000 to 100000 for the purchasing of the boa
and goodwill OF another corporation, for which
$500 600 was paid, q question of law was involved
in regard the deduction OF the bonded indebted
ness from the value of the personal property. 1t
fair to assume from the testimony OF the
president of the company that one-hah of the
Increase in the bonded Indebtedness created in
1893 namely $150000, was contracted for the good
will which was not taxable. In conclusion, the de-
csion says:
by deducting from the value of the assets the
sum of $550.000, instead of 100000 as the amount
of the mortgage indebtedness. we have remaining
the of $95,251 a the value Of the REALTORS
personal property, for which sum il should be
assessed. The orders of the Appellate Division and
of the Special Term should be modified re-
duce the assessment the sum above designated
and so modified affirmed. without costs of this
appeal 10 either party"