Court Opinion

ID: 5201074
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:52:31.762225+00
Date Added: 2024-06-11T08:27:11.787694
License: Public Domain

Clarke, J. (dissenting):
It seems to me that People ex rel. Orinoka Mills v. Barker (84 App. Div. 469) is clearly distinguishable from the case at bar. If not, although agreeing with Mr. Justice Hatch in his dissenting opinion therein, I would feel bound by the decision of this court. In that case it appeared that the relator had machihery and fixtures as part of its factory located in the State of Pennsylvania, and that there was at the relator’s mills in said State $25,000 in merchandise and materials. ' The petition alleged that, all of the assets of the relator were situate without the State of New York and within the State of Pennsylvania, “ and there subject to assessment for taxation, and although assessments for taxation- are and were paid thereon by your petitioner in said State of Pennsylvania.” It was upon those facts that a divided court held that the merchandise and materials at the mills were not taxable.
The authority relied on in tliaf case (People ex rel. Hoyt v. Comrs. of Taxes, 23 N. Y. 224) was itself as distinguishable. A resident of New York had capital employed in business in Hew Orleans, which was taxable and was taxed there, and farm stock and household furniture in the State of New Jersey which were taxable by the laws of the State of New Jersey. The property had an actual permanent situs outside the State, and the decision of the court rested upon the proof that the property was outside the State.
In the case at bar, however, the relator, a domestic corporation, having its principal office or place of business in the city of New York, buys raw material which consists of cotton clpth in the gray from various mills in ■ the south and in the Hew England States. This cotton cloth is kept at the mills until used, when it is shipped to the bleacheries and finishing works located in Hew England, Hew Jersey and the south, where it is made up or converted into the finished fabric in which the company deals. The process of conversion takes upon the average four or five months. Five7sixths of the product is shipped to New York for sale and disposition, and one-sixth to its office in Chicago. On the second Monday of January, 1904, the amount of raw material (gray cloth) goods in process and finished product, was $924,611.63. Ho part of this tangible personal property belonging to the relator had ever been within the State prior to that date. It belonged, however, to the relator, and *164subsequently - came within the State and was disposed of here. All the debts of the relator, amounting to $947,203.61 wherever payable and to whomsoever payable, in or out of the State, had been allowed as a reduction. • The tangible personal property outside of the State determined to be taxable in the State was fixed at $770,000, and was determined by the commissioners to be taxable upon the ground that it had no permanent situs without the State. The reason why property permanently located without the State is held not to be taxable here is that it is presumed to be taxable where located, and to tax it here would be to subject it to double taxation.
I fail to see how goods in transit from mill to bleachery and thence to store here can be reached and taxed in the State of temporary situs. The burden is upon the relator, it seems to me, to sustain the allegation of the petition and to show that the goods are so permanently located in the foreign State as to be there taxable. There is no allegation and there is no proof that the gray cloth or finished product is taxed or taxable anywhere outside of this State. The property of non-residents is not assessable within this State unless permanently invested in business within the State. (Tax Law [Laws of 1896, chap. 908], § 7.) The goods upon which this tax was assessed would not be táxable in the foreign State, because not permanently invested iii-business there, if the laws of the foreign State were similar to ours, and there is nothing to show that they are different; and, therefore, instead of imposing double taxation, if taxed here, it would seem, if hot taxed here, they would - escape all taxation. So that a great and prosperous business-house, with large assets in the shape of $770¿000 worth of property beyond all its debts and liabilities, which shortly is brought in and disposed of within the State, escapes taxation thereon because on assessment day it has not, though on its way, yet reached the State. It seems to me that the case is controlled by People ex rel. Pacific Mail S. Co. v. Comrs. of Taxes (64 N. Y. 541). In that case exemption was claimed upon certain steamships in process of construction outside oE the State of New York. Of course, such steamships never were and could not have been at any time prior to their completion within this State. The. court refused the exemption. Substituting the gray cloth articles in the case at bar in process of manufacture, for steamships, and it would seem as if the cases were analogous. “ If such an exemption can be upheld *165at all, it cannot be sustained where the change is only for a season, uncertain and vacillating, and merely consists in the building of vessels which are owned by an 'incorporation which has a location for the purposes of taxation within the State.”
It, therefore, seems to me that the order appealed from should be reversed and the assessment sustained.
Scott, J., concurred.
Order affirmed, with ten dollars costs and disbursements. Order filed.