Oswego Starch Factory v. Dolloway. THE OSWEGO STARCH FACTORY v. DOLLOWAY et al. The location, for the purposes of taxation, of a manufacturing corporation organized under the general act (ch. 40 of 1848), is the place designated in its certificate as that where the operations of the company are to be carried on. It is immaterial that the principal office or place for transacting the financial concerns of the company is located in a different town. For the purpose of taxing corporations under the statute, as amended in 1857 (ch. 456 of 1857, § 3), its stock is to be assessed at its actual value, whether above or below the nominal par, and this irrespective of its possessing any surplus capital or reserved funds. So held, where such a corporation had no surplus or reserved funds, but made annual dividends of all its profits, amounting to fifteen per cent and upwards, and the company was assessed for its capital at a valuation of seventy-five per cent above par. APPEAL from the Supreme Court. Action against the assessors of the city of Oswego, for an alleged illegal and excessive taxation of the capital stock of the plaintiff upon the tax-rolls of the city and county of Oswego, in consequence of which it had been subjected to taxes amounting to over $9,000, for the non-payment of which its property, to the value of $15,000, was sold by the collector. The trial was before a referee, who found these facts: The plaintiff is a manufacturing corporation, organized under the general act (ch. 40 of 1848), by the filing, in March, 1848, in the office of the Secretary of State and of the clerk of the county of Oswego, a certificate in duplicate, stating, among other things, that it was formed "for the purpose of carrying on the manufacture of starch in the city of Oswego," and that "the operations of the said company shall be carried on in the city of Oswego." Immediately after its organization, the company purchased lands in the city of Oswego and erected thereon buildings and machinery for the manufacture of starch, at an expense of about $300,000. It employed there, in the manufacture, about 300 persons, and used, annually, from 200,000 to 250,000 bushels of corn. 21 449 126 441 Oswego Starch Factory v. Dolloway. Four of the five trustees of the company resided, and always have resided, at Auburn, in Cayuga county. The president, secretary and treasurer of the company resided at Auburn, and kept an office there, for which the company paid rent. The meetings of the board of trustees were held at Auburn: the agent at Oswego, usually twice a week, forwarded to the treasurer at Auburn an account of sales made, and the same were entered by him upon the sales book, and the collections for sales were transmitted to the treasurer by the purchasers; or the treasurer drew on the purchaser through the Cayuga County Bank in Auburn: the raising and furnishing of funds for caryring on the business was at Auburn: the bank account there was large, some years amounting to nearly $1,000,000. The referee found other facts tending to show that Auburn was the seat of the financial transactions of the company. In 1857, the defendants, the assessors of the city of Oswego, assessed the plaintiff's real estate at $160,000. They deducted this amount from the nominal value of the capital stock, $450,000, leaving $290,000, and assessed the value of the said $290,000 at 75 per cent above par; making, as the assessment of the plaintiff's personal property, $507,500. No assessment was made for surplus profits or reserved funds. The referee found nothing as to the value of the stock, in point of fact; holding that the assessors having jurisdiction to make the assessment, its extent is matter for their judgment, and that they would not be liable for error in exercising it. The evidence, however, showed that there was no surplus capital or reserved funds, but that all the profits were divided annually, and that no dividend had been less than fifteen per cent. The referee found, as matter of law, that the plaintiff was legally taxable for personal property in Oswego, and not elsewhere, even if the principal office for transacting its financial concerns was in Auburn. Judgment was entered upon his report for the defendants, which having been affirmed on appeal at general term in the Oswego Starch Factory v. Dolloway. fifth district, the plaintiff appealed to this court. The case was submitted on printed arguments. John Porter, for the appellant. W. T. Curtis and Charles Rhodes, for the respondents. DENIO, J. The plaintiff's counsel maintain that there should have been a recovery in the Supreme Court upon two grounds: first, because the corporation was not liable to taxation on personal property at Oswego, but could only be assessed at Auburn; and, secondly, that it was improperly assessed the sum of $217,500 beyond the amount of its capital, after deducting the value of its real estate; whereas, as they insist, it was only liable to taxation on the nominal amount of its capital over and above the deductions for real estate. A question has been made, whether the defendants were liable to this action for their acts as assessors, assuming that the plaintiffs are right in their positions above mentioned; but the conclusions at which we have arrived render it unnecessary to express an opinion upon this last point. 1. We think the corporation was legally assessed and taxed, at Oswego. The act authorizing the creation of corporations for manufacturing purposes (Laws 1848, ch. 40), requires that the certificate of incorporation should state (among other particulars), "the names of the town and county in which the operations of the company are to be carried on ;" and the certificate under which the plaintiff's corporation was formed, accordingly declares that the operations of that company shall be carried on at the city of Oswego, in the county of Oswego; and it appears that the plaintiff in fact erected the manufactory there, and that all the business of manufacturing was carried on in that city. A portion of the books were kept at the treasurer's office at Auburn, and the general financial affairs were transacted there. If our judgment depended upon the relative proportion of the pecuniary business which was managed at one or the other of the two localities, it would be Oswego Starch Factory v. Dolloway. necessary to examine more critically the several particular facts found by the referee in order to ascertain whether they warrant his general conclusion, that the place for transacting the financial concerns and the principal office of the company was at Oswego; but being of opinion that the plaintiff could not, within the sense of the provision of the Revised Statutes to be presently mentioned, have any principal office for transacting its financial concerns except at Oswego, we do not pass any judgment upon the question of fact referred to. The Revised Statutes contain the following provision as to the place of taxing the property of corporations: "The real estate of all incorporated companies, liable to taxation, shall be assessed in the town or ward in which the same shall lie, in the same manner as the real estate of individuals. All the personal estate of every incorporated company, liable to assessment on its capital, shall be assessed in the town or ward where the principal office or place for transacting the financial concerns of the company shall be; but if such company have no principal office or place for transacting its financial concerns, then in the town or ward where the operations of such company shall be carried on." (1 R. S., 389, § 6.) This provision applied to all incorporations liable to taxation on their capital then existing, and to all such as should thereafter come into existence, whether their charters, or the certificates under which they were incorporated, when formed under general acts, confined them to any locality or not. The greater number of them were incorporated for carrying on some financial or industrial enterprise in some particular city or town, and this circumstance of locality was a part of their legal constitution; but a great many were of a character which did not permit them to be confined to any one local division of the State. Navigation companies, turnpike companies, and canal companies, were of this class, and also bridge companies spanning rivers dividing separate local jurisdictions, and some others whose business was of a general nature. In the aggregate, these corporations, unattached to any particular town or city, were very numerous. Without some special provision to meet the case, it would be Oswego Starch Factory v. Dolloway. impossible to determine in what place they were to be assessed in their capital; but as all property of joint stock corporations was to be taxed somewhere, there would be great uncertainty as to the place of taxation in such cases, and they might be assessed in the several towns or cities through which their operations extended; and this would be likely to produce a conflict among the different jurisdictions, and to cause much inconvenience to the companies, as well as to the public. It was to remedy this inconvenience, that the provision under consideration was enacted. It was not necessary to limit it, in terms, to those companies having no seat in a particular town or city, for it was assumed that the other class of corporations, namely, those having a fixed residence, would probably have a principal office for conducting their financial business in the town where they were located; and if they did not, the general language at the close of the section would meet their case. The plaintiff's position would require us to hold that a bank or insurar.ce company, chartered to carry on its business in a particular town, for instance in the city of New York, could lawfully establish its financial office in some neighboring townsuppose in the county of Westchester-und in that manner remove its residence, as regards its liability to contribute to the public burdens, to that suburban jurisdiction and deprive the municipality, of whose local administration it enjoyed the benefit, of any contribution towards the expenses of the local government. We are of opinion that when the legislature, by the act of incorporation, or the associates, by their certificate or articles executed pursuant to a general law, have attached the corporate body to a particular local division of the State, whether it be a city, town, or entire county, it can not establish such a principal office as is intended by the provision of the Revised Statutes, which has been quoted, out of such city, town or county. The general statute, authorizing the formation of corpora tions of the character of the plaintiff in this action, did not contemplate the creation of companies having no specific loca tion in some town or city. The statement which was required |