People ex rel. Smyth v. Lynch

Per Curiam.

There was no agreement that relator was to receive a salary from the P. & I. Agency, Inc., and without an agreement' no presumption arises that one is to be paid. (Mather v. Eureka Mower Co., 118 N. Y. 629.) The compensation which relator was to receive, under his agreement, was dividends from earnings. The controlling question in this case is the intention of the parties.” (Gaul v. Kiel & Arthe Co., 199 N. Y. 472, 477.) If the Tax Commission was warranted in regarding the alleged payment of dividends as a fiction which might be disregarded, and in looking to the substance rather than the form of the transaction in fixing this tax, it should consider the source from which the money came. If this is done, it appears that the money received by relator, which the Commission has determined to be a salary, was paid to him as an employee of the United States Shipping Board, a department of the United States Government, and is exempt from taxation under paragraph f of subdivision 2 of section 359 of the New York State Tax Law.

The determination of the State Tax Commission should be annulled, with fifty dollars costs and disbursements.

Hinman, Acting P. J., Hill and Hasbrouck, JJ., concur; Whitmyer, J., dissents, with an opinion, in which Davis, J., concurs.