Opinion
04-08-1893
In re ELECTRO PNEUMATIC TRANSIT CO. In re BOOKWALTER STEEL & IRON CO.
W. Y. Johnson, for the State. H. N. Barton, for respondents.
(Syllabus by the Court.)
Petition by the attorney general against the Electro Pneumatic Transit Company, and the same against the Bookwalter Steel & Iron Company, to restrain defendants from exercising their respective corporate franchises without payment of certain taxes. Decree for complainant.
W. Y. Johnson, for the State.
H. N. Barton, for respondents.
BIRD, V. C. The petitions in these cases were filed by the attorney general, showing that the respondents had been assessed under the act of the legislature entitled "An act to provide for the imposition of state taxes upon certain corporations, and for the collection thereof," (Supp. Revision, p. 1017,) approved April 18, 1884, their refusal to pay, and praying for an injunction enjoining them from the exercise of any franchise of said corporation, or the transaction of any business, until the said corporation shall have paid said tax and interest due thereon. All the allegations in these petitions are admitted by the respondents severally, but each claims, in effect, that it has been unable practically to do or carry on any business, within the intent or purpose for which it was incorporated. Because of this fact, it is insisted that an injunction should not be issued, and for this purpose they relyupon the cases heretofore decided by me. Faure Electric Light Co.'s Case, 43 N. J. Eq. 411, 5 Atl. Rep. 817, and New York File & Sharpening Co.'s Case, 43 N. J. Eq. 413, 5 Atl. Rep. 897. These cases support the contention of the respondents; but on behalf of the state it is insisted that a very recent decision of the supreme court (State v. State Board of Assessors, 25 Atl. Rep. 329) is directly in conflict with them. I think the merits of that decision are closely and fully stated in the headnotes, as follows: "A manufacturing company, to bring itself within the proviso of section 4 of the act of April 18, 1884, (Supp. Revision, p. 1017.) must be actually engaged in the business of manufacturing in this state." "A manufacturing company wishing to withdraw from active business must, to escape taxation, take proceedings under the thirty-fourth section of the corporation act to dissolve and surrender its charter and wind up its affairs." Although in this opinion no reference is made to the cases above stated, I cannot but regard it as effectually overruling them. The subject-matter being the proper construction of a statute respecting the imposition of taxes, over which the legal tribunals have complete jurisdiction, except so far as the legislature may otherwise provide, their determination must be final as to all parties concerned. The fourth section of the act referred to, after fixing the liabilities of certain corporations, declares "that all other corporations incorporated under the laws of this state, and not hereinbefore provided for, shall pay a yearly license fee or tax of one tenth of 1 per centum on the amount of the capital stock of such corporations: provided, that this act shall not apply to railways, * * * or manufacturing companies, or mining companies, carrying on business in this state." Under this statute every manufacturing corporation is liable to pay a tax of one tenth of 1 per cent. upon its capital stock for the license privilege or right which the state grants to it, unless it carries on the business of manufacturing in this state. If it does not pay the taxes imposed within the time specified, the attorney general may ask this court to issue an injunction restraining it from doing any business under its charter. I think, therefore, it is proper to say that whenever it appears that a corporation exists under the provisions of the act above quoted, which does not come within the exceptions therein named, and an assessment has been made against it which it does not pay, it is subject to be enjoined by the decree of this court from the transaction of any business. As long as such a corporation enjoys the license or privilege extended to them by the statute under which they are incorporated, they should respond to the taxes imposed under the act now under consideration, unless it can show that it is within the exception. The respondents are manufacturing corporations; each one has been assessed; neither has been engaged in doing business in this state. Consequently, the assessments not having been paid, a "proper case" has been made out for the interference of this court by its injunction; in other words, the only power given to, or duty imposed upon, the court of chancery by the act of the legislature is to issue its prohibitory writ.