Court Opinion

ID: 3581788
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:32:50.363998+00
Date Added: 2024-06-11T14:07:20.942889
License: Public Domain

The only question in this cause is, whether the appellant as a corporation, is subject to taxation, according to the laws of this state.
By the 1st section of title 4, "concerning the assessment of taxes, on incorporated companies," (1 R.S. 415,) "all moneyed, or stock corporations deriving an income, or profit from their capital, or otherwise, are liable to taxation on their capital." By the 51st section of the 3rd article, (1 R.S. 599,) every corporation "authorized by law to make insurance," is declared to be a "moneyed corporation." The appellant was a corporation, authorized by law to make insurance, (Sess. L. 1843, p. 199, § 1,) and was therefore a moneyed corporation. The presumption is, that an income or profit was derived from its business. This was one object for which it was created. The charter directs the profits to be estimated, (§ 11,) how they may be invested, (§ 8,) and when their accumulation shall exceed $100,000, how the excess shall be applied, (§ 13.) (Sess. L. supra.) *Page 448 
It was then, according to the provisions of the first section of the statute above quoted, "liable to taxation on its capital." By capital, I understand the legislature to mean, the fund upon which the incorporation transacts its business, which would be liable to its creditors, and in case of insolvency, pass to a receiver. In this sense, the capital of this corporation consisted of the premiums for insurance paid, or contracted to be paid, in contemplation of future risks, to be taken by the insurer. The first is analagous to "capital stock paid in;" the second, to "capital stock secured to be paid in," as mentioned in the 3rd subdivision of the 6th section of the statute.
The theory upon which these mutual insurance companies were formed, seems to have been, that earnings of the corporation, present and prospective, should constitute its capital; accordingly, the 4th section of this charter requires applications for insurance, amounting to $100,000, before the company can be organized. The 7th section provides for the payment of premiums, or the receipt of notes for risks taken by the company, at rates fixed by the trustees; and the 9th section, that notes may be received for premiums in advance, of persons intending to receive policies. These notes, whether given for premiums, or in advance, become the property of the corporation, to be negotiated, or disposed of in the ordinary course of its business; and they, together with the sums received for premiums, from time to time, constitute its capital, (§ 9.) (Deraismes v.M.M. Ins. Co. 1 Comst. 371. See cases in 3 id. 290.) This is unlimited. But by the 12th section of the charter, provision is made for the payment of dividends, and for ascertaining the interest of the corporators in premiums actually earned by the company and constituting a part of its capital stock, and it directs that certificates shall be issued as the evidence of that interest. The 13th section provides for the redemption of those certificates, when the net profits of the business shall exceed $100,000.
The appellant was, therefore, a moneyed corporation, authorized to derive a profit from its business, with a capital created in the manner above suggested, and consequently, by the first *Page 449 
section of the revised statutes above referred to, liable to taxation. The assessment of every such corporation indeed, is made conclusive evidence of its liability to taxation, and that it was duly assessed, unless the affidavit prescribed by the 9th section of the act is made, and presented in the manner there directed. (1 R.S. 416, § 9.)
The judgment of the supreme court should be affirmed.
Judgment affirmed.