Prior to the year 1853 moneyed corporations were assessed upon the amount of their nominal capital, whether its value in fact was more or less than its nominal amount (People v. Dolan, 36 N. Y. R. 62). In that year, and again in 1857 (Laws 1857, 2d vol. p. 1), the statute was amended, so that the assessment was made upon the capital stock and its surplus profits exceeding ten per cent., “ at its actual value.” The principle of assessing upon the actual value of the stock, instead of its nominal amount, was then introduced (auth. sup.).
The rule of assessing individuals upon their personal property is expressed in different language. It is in these words : “ The full value of all the taxable personal property owned by such person, after deducting the just debts owing by him ” (1 R. S. 391). The assessors, and the General Term, held that these two provisions furnished substantially the same rule. They held that the contingent liability of the company was not a debt owing by it, and that no deduction could therefore be made from the assessment on that account. I agree that this liability was not a debt owing by the company, and that if the same facts had been presented in behalf of an individual, he would not have been entitled to the deduction now claimed. If it is a debt, to whom is it owing ? If a debt, what is its amoimt in figures, and upon what: policy has it accrued 1 It is impossible to answer these questions, because, in fact, there is no present debt to any one.
I do not, however, agree in the conclusion of the Supreme Court, that therefore there can be no deduction on account of this circumstance. These questions are pertinent and conclusive in the case of an individual. He is entitled to deduct only the “ just debts owing by him.” As to him, there must be a creditor to whom the debt is owing, an amount certain, or capable of being reduced to certainty, and a contract or judgment upon *350 which. a debt arises. Hot- so, however, as to a corporation like that, in-question..- The:rule of.!assessment there is “the actual value ” of the capital. If a corporation or an individual has an actual estate in possession of $100,000,. and is liable as guarantor, or indemnitor, or endorser, or hail, for $50,000, and the principal in, all -these liabilities is insolvent, so.fhat he will -certainly have to pay. the $5.0,000,-is not the actual: value of his estate reduced by that, amount? -. Truej:h.e-cannot he. said to owe that amount until the lapse of time, or a notice of non-payment, ,or some other occurrence.will entitle some, other party to commence an action against him, .His, actual -estate, however, is reduced. in-value by just .-.that amountí ;-Ho; assessor or. individual could justly -say. that, “the actual value” of -his , estate, subject to these • contingencies, was as great as it - would t be if free, .and -clear- from them.- Ho man would- give.-him as much for .his. estate, subject to these claims; as if there were no such claims. .-Whether tested by the standard of., market or .selling value, or by what it- will ultimately produce.to the possessor, the contingent-liabilities make a reduction of value. (Oswego Starch Co. v. Dolloway, 21 N. Y. 458). I think, it was-, an error in the- assessors to-refuse to make these deductions: There was no. practical difficulty in-reaching a result by the.aid of authentic tables, and by such evidence as long-, established -insurance.-companies.- can readily furnish.: It rvas -the duty of the assessors to act upon the evidence before them, and to adjudge.how much the actual value, of -the stock .was reduced by these contingent - liabilities, and to-deduct from-the: assessment accordingly. ' ; -
■ The-evidence; as. presented, showed that-the. reduction would more than equal the surplus as-found by the- assessors, .-and there was..nothing, in contradiction or. disparagement of this evidence Their.action is judicial, and -to he.-governed.-by .the evidence before them.- • All - the-evidence before them in the present case showed that., there was a contingent liability sufficient to absorb all the- surplus, and I. see nothing to cast-do.ubt or suspicion upon it.-. The assessors should -have decided in accordance with the evidence-.(People v. Reddy, 43 Barb, 543; Oswego S. Co. v. Dol *351 loway, 21 N. Y. R. 1,60). There is nothing in the case to indicate that the roll is not still in the hands of the assessors; and they may yet correct their error by striking out the assessment of $40,000 for the year 1866.
The judgment should be reversed, and the assessors ordered to correct the roll by. striking out said sum of $40,000, assessed to the Appellants for the year 1866.
Reversed.
JOEL TIFFANY,
State Reporter.