The Bank of Utica vs. The City of Utica, 4 Paige Ch. 399

The Chancellor. As the charter of the city of Utica gives to the common council of that city the exclusive control and direction as to the assessment and collection of the city taxes, 1 think the complainants had a perfect remedy at law, by an application to the supreme court for a mandamus, to compel the common council to correct their assessment and taxation of the property of the bank, if it was illegal.

The remedy by mandamus, however, would be much more imperfect and doubtful, in the case of an ordinary town and county tax, where the assessment is made by one body and the tax is imposed by anotherespecially if the error or illegality did not appear upon the face of the assessment roll. In the present case, the illegality, if any, appears on the warrant which has been issued, by the common council of Utica, for the collection of the tax.

The complainants, therefore, appear to have another adequate and more certain remedy at law, by an action of trespass, should the defendants attempt to enforce the payment of the tax by a sale of the property of the bank.

This court, however, will not refuse to take-jurisdiction of a case merely on the ground that the complainant has a perfect remedy at law, if the parties have submitted themselves to the jurisdiction of the chancellor without objection. (2 Paige’s Rep. 509.) - By the written stipulation between the parties, for the purpose of bringing this question before the court for a decision upon the complainants’ bill alone, the defendants have expressly agreed to waive the objection, that there was a certain and adequate remedy at law, for the complainants, if the construction of the statute is as contended for by them.

And in this case there can be no doubt as to the power of the court, if it takes jurisdiction of the cause, to give a perfect remedy to the complainants, by the ordinary decree, for a perpetual injunction against the collection of this tax. Finding myself thus legally compelled to apply the maxim, modus el comenllo vincunt legem, even to a question of jurisdiction, I shall proceed to examine and decide this case upon its merits. There is no doubt as to the right of the common council of the city of Utica, under the forty-fourth

section of the charter, to impose a city tax on the real and personal estate of a monied corporation located in that city; which tax is to be imposed upon the same property that the board of supervisors of the county of Oneida are authorized to tax for town and county expenses. (Laws of 1832, p. 26.) Reference must therefore be had to the provisions of the general tax law, as contained in the 13th

chapter of the first part of the revised statutes, to ascertain what property is thus taxable. By the first section, (1 R. S. 387,) it is declared that all lands and all personal estate, within this state, whether owned by individuals or corporations, shall be liable to taxation; subject to certain exemptions specified in a subsequent clause of the statute. This

section of the statute, taken by itself, would, of course, include all the personal estate of a corporation, beyond the amount of its debts, whether more or less than the amount of its nominal capital. The subsequent provisions of the statute, however, show what the legislature mean by the term personal estate, when applied to incorporated companies liable to taxation on their capital. It means so much of the capital stock paid in, or secured, as will remain after deducting therefrom the actual costs of all the real estate of the company. The regulations as to the assessment of incorporated companies, appear to be all contained in the fourth title. (1 R. S. 414.) The first

section declares what corporations shall be liable to taxation on their capital; and by a previous provision, all others are exempt from taxation on their personal estates. The second

section directs the proper officer of the company to furnish to the assessors of the town or ward where it is liable to be taxed upon its capital, a statement of the amount of its capital paid in, or secured; the amount of the same which is invested in real estate, at the actual cost of such real estate ; and the amount of the capital stock held by the state, or others, which is exempt from taxation. The principal ob- ject of this statement appears to be to enable the assessors te ascertain what portion of the capital stock was to be taxed ¿s the personal estate of the corporation.

And the sixth section, accordingly, directs the amount of such capital stock to be inserted in the assessment roll in the column of personal estate, after deducting therefrom the cost of the real estate, and the stock which is exempt from taxation. I think it is evident from these different provisions, that the legislature intended » to tax corporations upon the nominal amount of th'e stock itself, and not upon its actual value to the stockholders; except as to manufacturing, turnpike, and marine insurance companies, which are to be taxed on a different principle.

If the effects of a corporation have been permitted to increase beyond the nominal value of its capital stock, it is perfectly just and equitable that the excess should be subject to taxation; and it would be equally reasonable, on the other hand, to diminish the amount of tax where a part of the capital had been lost, by the depreciation of property, or otherwise. But the legislature, for the sake of convenience, have only applied that principle to a few corporations, where it .was probable there might be a great difference between the nominal and the actual value of their stocks. The object of the eighth

section of this title was not to enable the officers of the, corporation to reduce the amount of the assessment upon its capital stock, by swearing that the value of the stock does not exceed a certain amount. But it was to enable them to correct any erroneous estimate of the amount of the capital stock liable to taxation as such; and also to reduce an over estimate of the actual value of the real estate described in the assessment roll. The tax upon the supposed surplus funds of the bank being unauthorized by the existing laws, an injunction must issue to restrain the defendants from collecting the same.