Court Opinion

ID: 5195171
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:42:10.910953+00
Date Added: 2024-06-11T08:27:03.330523
License: Public Domain

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,, *576upon 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. . "