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missioners, which might inquire in St. Lawrence and Erie and Suffolk counties, and the counties between, and adopt a rule uniform in all these several counties. Manifestly the assessors of the city of Rochester, with the large number of individual pieces of property to assess in that city, and with the limited time at their disposal, could undertake no such task.
The proposition here, however, is for the court to permit what the Legislature has decided should not be done; that is, to permit the Rochester board of assessors to reduce and regulate and control the assessment of the special franchises of this relator within the confines of that city. It will be noticed, too, that this power to regulate, which would be given by judicial authority to boards of assessors, would be a limited power, and would relate only to the reduction of assessments. If the owners of special franchises succeed in establishing such a rule of law as is here contended for, and the State Board of Tax Commissioners assess their property in the city of Albany at what the corporation considers 75 per cent. of its value, such an assessment would be undisturbed by the owner. On the other hand, if the State Board of Tax Commissioners assessed their property at a full and fair value in Rochester, and the local boards assessed the real estate at 80 per cent., the owners can obtain a reduction by the courts to correspond with the assessors' value; in other words, local boards of assessors will be given full authority to reduce the assessment of special franchises in the territory under their jurisdiction, but cannot increase it. See People ex rel. v. Priest, 181 N. Y. 300-305, 73 N. E. 1100, where it is held that local assessors can exercise no powers or judicial functions in the assessment or valuation of special franchises.
The Court of Appeals has held (Mercantile Nat. Bank v. City of New York, 172 N. Y. 35, 64 N. E. 756) that where the assessors had assessed bank stock (personal property) at full value, and where real estate on the same roll was assessed at not more than 60 per cent. of its value, certiorari would not lie to compel the equalization of the assessment of the bank stock with that of the real property, nor would equity intervene. The assessment of real property in the city of Rochester is subject to no deduction whatever. If a man owns a house and lot-that is, has the title to a house and lot-in the city of Rochester, he is, or should be, assessed by its assessors for the full value of that property. If the property is worth $4,000, and it is subject to a mortgage of $3,500, the owner must still, if the assessors do their duty, pay a tax upon the sum of $4,000. The taxes upon special franchises, however, are subject to various deductions by the statute. See section 46 of the tax law as to what those deductions are. No such deductions are known or permitted to the owner of the house and lot referred to, or the ordinary form of real property, so that equalizing special franchise valuations with the valuations of real estate as it appears upon the tax roll of Rochester according to the stipulation here would not work out equality. The special franchise owner would then pay a less tax according to valuation than would the owner of an ordinary piece of real estate.
The Court of Appeals, as we have seen, has held that this property
is concerned; that it is neither real nor personal, but partaking of the nature of both. We have seen that the statute requires and is satisfied by uniformity of taxation for the same kind or class of property, as of bank stock, as distinguished from real property. So it is immaterial into which of the two great classes of property, real or personal, this particular property is placed, as, if all owners of special franchises are treated alike, and assessed at full value, no injustice is done to the individual owners of special franchises.
In the struggle to keep from direct taxation, on account of its rapid growth, the state has lately been reaching out for different classes of property to tax, and adopting a new method of taxation, and diverting a portion of the revenues thus obtained from the locality where the property is situated into the coffers of the state. The courts have approved this procedure. A recent instance of this is the mortgage recording tax, by which an entirely different method has been adopted for reaching the owners of that class of personal property from that which before had obtained, and which now prevails for the greater amount of personal property, so that the owners of mortgages on real estate are now, for purposes of taxation, in a class by themselves. This property in a sense partakes of the nature of realty, because it is a lien on real property; but still it is classed as personalty. Special franchises are an intangible right connected with real estate, and the Legislature has simply designated this interest or right "real estate" for the purposes of taxation.
See the opinion of Mr. Justice Herrick in People ex rel. v. Priest, 41 Misc. Rep. 550, 85 N. Y. Supp. 237, holding that the court has no power to direct the State Board of Tax Commissioners to violate the law and assess property at 70 per cent. of its true value.
In Coulter v. Louisville & Nashville Railroad Company, 196 U. S. 599, 25 Sup. Ct. 342, 49 L. Ed. 615, it is held:
"It is not beyond the power of a state, so far as the federal Constitution is concerned, to tax the franchise of a corporation at a different rate from the tangible property in the state."
The point is also made by the city of Rochester and the State Board of Tax Commissioners that certiorari will not lie to equalize the values of special franchises fixed by the State Board of Tax Commissioners with that of ordinary real property fixed by the local assessors, for the reason that certiorari will only lie for inequality to review an assessment, on the ground that it is made "at a higher proportionate valuation than the assessment of other property on the same roll by the same officers." Article 11, § 250, Tax Law. This proceeding is brought under section 45 of the tax law, which, so far as material, is as follows:
"An assessment of a special franchise by the State Board of Tax Commissioners may be reviewed in the manner prescribed by article 11 of this chapter, and that article applies so far as practicable to such an assessment, in the same manner and with the same force and effect as if the assessment had been made by local assessors.
This relator claims that section 250 should not be restricted in its meaning by the court, and that such a construction should be given it as would permit of the maintenance of this proceeding, and that the
placing of the special franchise valuation on the assessment roll by the local boards of assessors is sufficient compliance with the statute to authorize the issuing of the writ.
Although I have preferred to place my decision on the broader ground that the claimed inequality is not in fact an inequality, still I think that this claim of the state tax board is correct, and that the review contemplated and provided for by section 45, so far as inequality of assessment is concerned, relates to assessments or valuations of different special franchises alone, and not its comparison with the assessments of any other kinds of property. But the principal reason for refusing to direct the state board to lower their assessment or valuation to correspond to that of the local assessors is that the state board has complied with the law and the local assessors have not, and courts should not, and I think on examination will not, compel such a board to do violence to its conscience by returning as correct a valuation it does not believe to be correct; nor will the court sustain the action of an assessing board which has not complied with the law and reverse the action of a board that has complied with it.
It follows that the several writs of certiorari should be quashed, with costs.
VAN RIEMPST v. WEIHER.
(Supreme Court, Appellate Division, First Department. April 8, 1909.) INJUNCTION (§ 26*)-PROSECUTION OF ACTION.
Where a tenant sued to cancel the lease, claiming it was induced by fraud, and alleged facts which, if established, might entitle him to a cancellation, he was entitled to have an action brought by the landlord in the Municipal Court for rent stayed until determination of the action for cancellation.
[Ed. Note. For other cases, see Injunction, Dec. Dig. § 26.*]
Appeal from Special Term, New York County.
Action by Theodore S. Van Riempst against Lorenz Weiher. From an order denying a temporary injunction, plaintiff appeals. Reversed, and motion granted, upon condition that an undertaking, to be approved by a justice of the Supreme Court, be given.
Argued before INGRAHAM, LAUGHLIN, CLARKE, HOUGHTON, and SCOTT, JJ.
Allan R. Campbell, for appellant.
Joab H. Banton, for respondent.
HOUGHTON, J. The action is brought to rescind and cancel a lease which the plaintiff claims he was induced to enter into through the fraud of the defendant. On discovery of the fraud the plaintiff vacated the premises, and the defendant brought action in the Municipal Court for installments of rent. The plaintiff moved at Special Term to enjoin the prosecution of such action for rent until the determination of this action for cancellation of the lease, and tendered
an undertaking to pay any judgment ultimately recovered in the Municipal Court. Such injunction was refused, and we think improperly. While it is true that this plaintiff, as defendant in the action for rent in the Municipal Court, could set up the defense of fraud, complete relief could not be given him in that court. The Municipal Court would have no jurisdiction to declare the lease void and order its cancellation. The plaintiff sets forth facts in his complaint which, if satisfactorily established, may entitle him to a cancellation of the lease. If the lease shall be declared void, such a decree would end all controversy. Although a judgment in the Municipal Court in favor of the present plaintiff might be a bar to the recovery of future installments of rent, it would not prevent the bringing of actions thereafter in which such defense must be pleaded. Inasmuch as the present action will determine the entire controversy between the parties, we are of the opinion that the Municipal Court action for rent should be stayed until the determination of the present action. The plaintiff, however, should give a proper undertaking, conditioned, in case he shall not be successful in obtaining a cancellation of the lease, to pay all rent due or to become due thereon.
On the giving of such an undertaking, to be approved by a justice. of the Supreme Court, the order appealed from is reversed, with $10 costs and disbursements, and the motion for an injunction, staying the prosecution of the Municipal Court actions, granted, without
INGRAHAM and LAUGHLIN, JJ., concur.
CLARKE, J. I dissent. The allegations of fraud in the making of the lease, if sustained, would be a complete defense in the action for rent. There is, therefore, no necessity for an action in equity to procure the cancellation of the lease. If a dissatisfied tenant is entitled to enjoin the prosecution of an action for rent, an unnecessary and intolerable burden will be imposed upon property holders in this city.
The order appealed from should be affirmed, with $10 costs and disbursements, and the motion for an injunction denied, with $10 costs.
SCOTT, J., concurs.
(61 Misc. Rep. 518.)
HYDE et al. v. EQUITABLE LIFE ASSUR. SOCIETY OF UNITED STATES et al.
(Supreme Court, Special Term, New York County. December, 1908.)
1. INSURANCE (§ 36*)—Stock COMPANIES-INVESTMENTS-RIGHT TO QUESTION. Whether an investment by an insurance company in the stock of a bank is authorized or not can be inquired into by the state alone.
[Ed. Note. For other cases, see Insurance, Dec. Dig. § 36.*]
*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
2. CORPORATIONS (§ 377*)-RIGHT TO HOLD STOCK IN ANOTHER COrporation. A corporation may take the stock of another corporation in payment of a debt.
[Ed. Note. For other cases, see Corporations, Cent. Dig. § 1533; Dec. Dig. § 377.*]
3. CORPORATIONS (§ 389*)-RIGHT TO HOLD STOCK OF ANOTHER CORPORATION. It will not be assumed that stock held by one corporation in another was acquired ultra vires or unlawfully.
[Ed. Note. For other cases, see Corporations, Dec. Dig. § 389.*]
4. FRAUDS, STATUTE OF (§ 21*)—ORIGINAL OR COLLATERAL PROMISE.
An agreement to indemnify the guarantors of an indebtedness incurred by another for the accommodation of the indemnitor is not within the statute of frauds, and not required to be in writing.
[Ed. Note. For other cases, see Frauds, Statute of, Cent. Dig. § 33; Dec. Dig. § 21.*]
5. GUARANTY (§ 100*)-RIGHTS OF GUARANTOR-INDEMNITY.
A person for whose accommodation an indebtedness has been guaranteed will be held to have impliedly agreed to indemnify the guarantors. [Ed. Note. For other cases, see Guaranty, Dec. Dig. § 100.*]
6. CORPORATIONS (§ 370*)—-Powers and LIABILITIES IMPLIED.
A corporation, when acting within the scope of its powers, is subject to the same implications in consequence of its acts as an individual would be. [Ed. Note.-For other cases, see Corporations, Dec. Dig. § 370.*]
7. INSURANCE (§ 36*)-COMPANIES-POWERS-ULTRA VIRES-ESTOPPEL.
Where an agreement by an insurance company to indemnify the guarantors of an indebtedness incurred by another for its accommodation impinged no public interest, was made for the benefit of all the stockholders and policy holders, and offended no rule of public policy, the company's acceptance and retention of the advantages of the guaranty and the guarantors' assumption of liability on the faith of the promise of indemnity estop the company from setting up that its promise was ultra vires.
[Ed. Note.-For other cases, see Insurance, Dec. Dig. § 36.*]
8. CORPORATIONS (§ 316*)-DIRECTORS-TRANSACTIONS WITH CORPORATION-VALIDITY.
An agreement by a corporation to indemnify the guarantors of an indebtedness incurred by another for the accommodation of the corporation is not void because some of the guarantors were directors of the corporation, but at most voidable.
[Ed. Note.-For other cases, see Corporations, Dec. Dig. § 316.*]
9. CONTRACTS (§ 98*)-VOIDABLE CONTRACTS-EFFECT.
An agreement that is voidable, and not void, is to be given effect until disaffirmed.
[Ed. Note. For other cases, see Contracts, Dec. Dig. § 98.*]
10. CORPORATIONS (§ 434*) - POWERS AND LIABILITIES DUTY TO PROTECT AS
The duty of a corporation to preserve its assets exists, irrespective of whether their original acquisition was authorized.
[Ed. Note. For other cases, see Corporations, Dec. Dig. § 434.*]
11. INSURANCE (§ 36*)-POWERS-IMPLIED PowerS-BORROWING MONEY.
A life insurance company has implied power to borrow money to preserve its assets, and, having the authority, its choice of a means, where neither corrupt nor prohibited, presents no question for judicial interference.
[Ed. Note. For other cases, see Insurance, Dec. Dig. § 36.*]