Case Name: The People of the State of New York ex rel. The Weber Piano Company, Respondent, v. James L. Wells and Others, as Commissioners of Taxes and Assessments of the City of New York, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1904
Citations: 95 A.D. 574
Docket Number: 
Parties: The People of the State of New York ex rel. The Weber Piano Company, Respondent, v. James L. Wells and Others, as Commissioners of Taxes and Assessments of the City of New York, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 95
Pages: 574–578

Head Matter:
The People of the State of New York ex rel. The Weber Piano Company, Respondent, v. James L. Wells and Others, as Commissioners of Taxes and Assessments of the City of New York, Appellants.
Assessment for tarnation of the capital stoclc of a corporation, whose real property is subject to a mortgage which it is not obligated to pay -¡- the value of the equity of redemption only is covered by the assessment, from which is deducted the assessed ■ value of the real property.
Under section 12 of the Tax Law (Laws of 1896, chap. 908), which provides, “ The capital stock of every company liable to taxation, except such part of it as shall- have been excepted in the assessment-roll or shall be exempt by law, together with its surplus profits or reserve funds exceeding ten per centum of its capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations actually owned by such company which are tax- . able upon their capital stock under the laws of this [State, shall be assessed at its actual value,” a domestic corporation owning real estate, incumbered b.y a. mortgage which has not been assumed by the corporation, is entitled to have the assessed valuation of such real estate deducted from the value of its capital stock in determining the assessable value of such capital stock notwithstanding-that in determining the value of its capital stock its equity in the real estate-was alone considered.
Van Brunt, P. J., and McLaughlin, J., dissented.
Appeal by the defendants, James L. Wells and others, as commissioners of taxes and assessments of the city of New York, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 21st day of March, 1904, vacating an assessment upon the capital stock of the relator for the year 1903.
George S. Coleman, for the appellants.
Henry Warren Beebe, for the respondent.

Opinion:
Laughlin, J.:
The question of law presented for decision by this appeal is,, whether a domestic stock corporation which owns real estate subject, to a mortgage, it not being liable for the indebtedness thus secured, is entitled to have the assessed valuation of the real estate deducted from the value of its capital stock in determining the assessable, value of the capital stock where its equity in the real estate only was considered in determining the value of the capital stock. The, statutory provision under which the capital stock of such a corporation is assessed is section 12 of the Tax Law (Laws of 1896, chap. 908), which provides as follows: " The capital stock of every company liable to taxation, except such part of it as- shall have been excepted in the assessment-roll or shall be exempt by law, together-with its surplus profits or reserve funds exceeding ten per centum, of its capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations actually owned by such company which are taxable upon their capital stock under the laws, of this State, shall be assessed at its actual value."
A compliance with this statute manifestly requires, in the first, instance, that the value of the capital stock of the corporation shall be determined. This requires a consideration of its assets and liabilities. In case it owns real estate with an outstanding mortgage,, upon which it is not liable, it is clear, I think, that the real estate constitutes an asset merely to the extent of the equity of the corporation in the land. Therefore, I think the assessors were right in adopting the value of this equity, rather than the value of the land, in first ascertaining the assets of the corporation. That is the whole question, because the Legislature commands that the assessed value of the real estate shall be deducted from the value of the capital stock. This is, I think, the true construction of the statute. The Legislature intended that the real and personal property of such a corporation should be assessed at its fair and true value, the same as the property of an individual, with the exception that it does not provide for a deduction from the individual's personal property of the amount of any mortgage that may be a lien upon his real estate, unless he is liable for the indebtedness secured by the mortgage. This omission may have been made on account of the fact that all personal property of corporations is reached for taxation, but only a small percentage of the personal property of individuals. Inasmuch, however, as the capital stock of a corporation represents all its property,^both real and personal, it was necessary that the valuation should be ascertained in a manner different from that employed in the case of an individual. The Legislature, therefore, directed that the value of the capital stock, which represents the value of all the assets of the corporation, including both real and personal property, should be first ascertained; and, instead of directing that this amount be assessed against the capital stock and providing that the real estate should not be assessed at all, it directed that this should he the total amount of the assessment to be paid by the corporation, but that that part of it which is to be paid by, the real estate should be deducted from the total, leaving the balance to be assessed against the capital.
It follows, therefore, that the order should be affirmed and the proceeding dismissed, with fifty dollars cost and disbursements.
Pattebson and Ingbaham, JJ., concurred; Van Brunt,' P. J., and McLaughlin, J., dissented. . "