International Life Assurance Co. v. Commissioners of Taxes

By the court—Davies, P. Justice.

Taxes are contributions imposed by the government for the support of the state. In all just governments it should be a cardinal principle that such *208impositions should be equal, and that all the property within the state should contribute its equal share of the burden imposed. This is upon the principle, that, as all property within the state is equally protected by its laws and institutions, so all property within its boundaries should alike equally contribute to their maintenance and enforcement. In this spirit, our Revised Statutes have declared, that all lands and personal estate within this staté, whether owned by individuals or by corporations, shall be liable to taxation, subject to the exemptions hereinafter specified.” (1 Rev. Stat. p. .387, title 1, sec. 1.) By section 5 of title 2, it is declared that every person shall be assessed in the town or ward where he resides when the assessment is made, for all personal estate owned by him, including all personal estate in his possession or under his control as agent, trustee, &c.

Corporations. are to be assessed in the town or ward in which the principal office or place of transacting the financial business of such company is situated. (Section 2, of title 4, p. 414, 1 R. S.)

The property of these plaintiffs, they being non-residents of the state, would seem not to be taxable, unless the same is regarded as being in the possession or under the control of their agent residing in this state. That view of the case will be hereafter considered.

In the case of Wilson agt. The Mayor, &c. (1 Abbott, p. 4), it was held, after a very full and minute examination of the statutes, that persons not inhabitants of this state were not taxable on their personal property used and employed in business in this state. In other words, personal property will only be taxed where the owner resides. This case was decided in 1854, and probably had some influence upon the passage of the act of 1855.

This act declares that all persons or associations doing business in this state, and not residents thereof, shall be assessed and taxed, on all sums invested in any manner in said business, the same as if they were residents of this state. (Laws of 1855, chap. 37.)

*209It is insisted, on the part of the plaintiffs, that this act has no application to them; that they are-neither persons nor associations, and, therefore, unaffected by its provisions.

They have each $100,000 invested in the business carried on by them in this state, and which is declared to be a fund for the security of their creditors within the United States. The provision of our statutes, in reference to corporations, is, that they are liable to taxation upon their capital. (1 R. S. 414, § 1.) And the capital, subject to taxation as such, is defined by the court of appeals to be that fund upon which the corporation transacts its business, which would be liable to its creditors, and in case of insolvency pass to a receiver. (Mutual Ins. Co. agt. Supervisors of Erie County, 4 Coms. 448.) We have seen that these deposits made by these plaintiffs are to be held as a fund to meet their liabilities to their creditors. By the sixth section of the act of 1853, companies organized under that act were to have a capital of $100,000, before they could proceed to the transaction of business, and this, in the seventh section of the act, is denominated capital. On this capital our domestic corporations are liable to taxation, and the legislature has declared, by the 15th section, that no foreign corporation shall be permitted to transact any business within this state, until it deposits a like amount of like securities, and for the same purpose, with the comptroller.

Do the foreign corporations, with their capital of a like amount with the domestic, and both formed for the same purpose, stand in a more favorable position than the domestic, in reference to taxation ? Is the foreign capital exempt, while the domestic is taxed ? Upon the point wenre now considering, the solution of this question depends upon the construction to be given to the act of 1855.

If its language is sufficiently broad to include these plaintiffs, there can be no question that they have been legally assessed.

It seems to us that the case of The People agt. Utica Ins. Co. (15 John. 258, and the cases there cited), are quite decisive on this point, and the rules there laid down, as applicable to the *210construction of statutes, may well be applied here. See also the case of Ontario BanJc agt. Brownell (10 Wend. 186). We think it follows, from these authorities, that this statute may be regarded as including corporations, and we conclude, therefore, that corporations, not created by the laws of this state, are to be regarded as non-residents, and, if they transact business within this state, they shall be assessed and taxed, on all sums invested in any manner in said business, the same as if they were residents of this state. As to their funds and means employed in business within this state, they have the same burdens imposed on them as residents of this state, and no greater.

A corporation created by another state, it is now well settled, is a citizen or resident of the state creating it. (Louisville Railroad Co. agt. Letson, 2 How. U. S. Rep. 497.)

But, supposing, for any cause, the corporation or association of the plaintiffs is not liable to be assessed and taxed; upon what principle can their property, under the control and in the possession of their agent, be exempt ?

Section 5, of title 2d, already referred to (1 Rev. St.p. 389), declares that every person shall be assessed in the town or ward where he resides, when the assessment is made, for all personal estate owned by him, including all personal estate in his possession or under his control as agent, trustee, &c.

How, we think, it may be fairly argued that this fund, deposited with the comptroller as a security for the policy owners, is in the possession and under the control of the plaintiffs’ agents resident within this state, within the meaning of this section, and liabl^ to be assessed.

But as the assessment has not been made in that form, it is unnecessary definitely to pass upon this point. As to that portion of the capital or fund of the plaintiffs in the second suit, invested in the stock of the United States, we think the same is not taxable, and that the order of the special term in that respect was correct. (1 Kent's Com. 9th ed. p. 474; Weston agt. The City of Charleston, 2 Peters' U. S. Rep. 449.)

The order appealed from by the plaintiffs in the first above *211entitled cause is affirmed with costs; and the order appealed from in the second above entitled- cause is affirmed without costs to either party, on the appeal.