This is an appeal from ah order denying a motion to dismiss the present action, which is brought to recover the personal taxes, for the year 1907, amounting to $2,355.31, assessed against the defendant, a domestic corporation, on its capital stock and surplus, valued at $158,700.
The affidavits established that the defendant is a corporation organized in the year 1906 to take over the business of the firm of Chase, Talbot & Co., who were engaged in finding purchasers for lumber sent to them on consignment, being remunerated by commission on sales if made. The corporation was organized by Hammond Talbot (son of one" of the firm) and Frederic Eaton, and its notes were issued in payment for the book accounts, contracts and good will of the firm. The contracts proved to be sources of loss; because of. business conditions in 1907 and 1908 the book accounts proved to be of but *285small value. The notes have never been paid. Out of its authorized capital of $250,000 the corporation issued but $170,000, all to Talbot and Eaton, for what consideration does not appear. No money was ever paid for any stock. It now satisfactorily appears that in 1907 the corporation was insolvent, its debts exceeding its assets by over $20,000, and it was utterly unable to pay the taxes or any part thereof. When its officer was examined in November, 1909, its only property was office furniture worth $150 to $200. It had no bank account, but only bank credits, against future commissions. It is shown that the statement furnished, for 1907 to the department of taxes and assessments, on which the tax was based, was erroneous and not supplied by any officer of the corporation.
This motion is made under section 301 of the Tax Law (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], as amd.'by Laws of 1909, chap. 374), as follows: “ Where the person or corporation against whom a proceeding or suit is brought to collect a personal tax in arrears is unable for want of property to pay the tax in whole or in part, or where for other reasons upon the facts as they existed either before or after the assessment was made it appears to the court just that said tax should not be paid, the court may dismiss such suit or proceeding absolutely, without costs, or on payment of such part of the tax as may be just, or on payment of costs, and may direct the cancellation or induction of the tax.”
It clearly appears that the defendant was unable for want of property to pay the tax in whole or in part, and its motion should, therefore, have been granted.
The order appealed from should be reversed, without costs, and the motion to dismiss the action granted, on payment by defendant of taxable costs to date of making the motion.
McLaughlin and Scott, JJ., concurred; Ingraham, P. J., and Clarke, J., dissented.