Third Department, September, 1913. App. Div.] cededly decedent was familiar. None of these rules, however, in any way prohibited a conductor from coupling or uncoupling cars, but upon the other hand provided that conductors must assist in making up their trains when necessary. The duties of decedent instead of having been supervisory, as appellant contends, seem to have been active and general, as indicated by the rules introduced in evidence, extending even to the unloading of freight, in which work the trainmen were by rule required to assist the conductor. The plaintiff introduced evidence to the effect that the manner in which decedent was attempting to perform the act of uncoupling the cars and closing the angle cock, which latter act was advisable, was the customary one upon defendant's railroad, and that had the cars been in proper condition there would have been sufficient space within which decedent might have stood and performed the operation in safety. Defendant called witnesses who testified that it was decedent's duty to give the stop signal before stepping between the cars. Upon the part of plaintiff, however, there was testimony to the effect that the engineer having held the engine passive for several minutes, decedent had the right to conclude that the engineer had abandoned the attempt to move the eight cars, and that the engineer as vice-principal would observe the rule requiring him to give a signal by ringing the bell when about to move the engine, and hence that it was safe for decedent to enter between the cars and uncouple them without decedent having first given the stop signal. Of two disinterested witnesses who were watching the train, one testified that the engine stood still from three to five minutes, and the other that it stood still from four to five minutes before backing up at the time decedent was caught between the cars. That decedent had the right to expect that rule 30 would be observed after the engine had become passive is also established by the testimony of the engineer, as follows: "We keep trying to move it [the engine] until we come to the conclusion ourselves that we can't move it, then we give up and let the engine lie dormant. Before we move our engine again in any way we are supposed to give a signal. When the engine has been at a standstill the signal on the Lehigh Valley requires * * Third Department, September, 1913. [Vol. 158. that the bell shall be rung before the engine is moved." Evidence was also introduced by plaintiff that it was customary upon defendant's road when an engine had remained stationary for three or four minutes after backing and filling, for a person to walk between cars without signaling the engineer, and that it was also customary under such conditions for the engineer to give a signal before moving his engine. Under a fair construction of the evidence most favorable to plaintiff, to which she is entitled upon this appeal, the question as to the negligence of the decedent was plainly one for the consideration of the jury. The charge of the trial justice was able and impartial and clearly covered all the issues involved, and there are no exceptions calling for a reversal of the judgment. While some of the remarks of plaintiff's counsel made during the trial of the action, of which defendant complains, are perhaps justly the subject of criticism, yet we do not think that the rights of the defendant were seriously prejudiced thereby. The verdict was fully warranted by the evidence, and the judgment and order appealed from should be affirmed. All concurred, except SMITH, P. J., dissenting; Kellogg, J., not sitting. Judgment and order affirmed, with costs. THE PEOPLE OF THE STATE OF NEW YORK ex rel. THE MERCANTILE SAFE DEPOSIT COMPANY, Relator, v. WILLIAM SOHMER, as Comptroller of the State of New York, Respondent. Third Department, September 10, 1913. Tax - franchise tax dividend — capital employed "during the preceding year"— Tax Law, section 182, construed. Upon certiorari to review the proceedings of the State Comptroller in determining a franchise tax, it appeared that the relator, immediately after its incorporation, with an authorized capital stock of $500,000, only $300,000 of which was ever issued, purchased for the sum of $200,000 the good will, business and lease of another company, and at once engaged App. Div.] Third Department, September, 1913. in the prosecution of such business; that the remaining $100,000 received from the sale of its capital stock was and still is invested in dividendpaying securities; that the rental value of premises occupied by the relator having increased in value, a suit was brought against it for the cancellation of the lease, which was settled about May 1, 1910, by the relator surrendering the lease and the payment to it of $1,050,000 and the giving of a new lease; that May 3, 1910, the relator divided pro rata among the holders of its $300,000 of capital stock said $1,050,000, and in July, 1910, reduced its capital stock to $100,000, and that the State Comptroller in fixing the amount of the franchise tax, under section 182 of the Tax Law, deducted from the said $1,050,000 the sum of $200,000 as representing the invested capital of the relator, and treated the division of the $1,050,000 as a division of capital or assets, and treated the balance of $850,000, together with the sum of $38,250, the amount of prior dividends, as the aggregate of the dividends made or declared by the relator during the year ending October 31, 1910, and assessed the same as the dividends paid upon $100,000 of capital stock. Held, that the said $850,000 constituted a dividend made or declared within the meaning of section 182 of the Tax Law; That the Comptroller erred in assessing the tax upon the sum of $100,000 as par value of the capital stock during the year ending October 31, 1910. Such tax should have been computed upon the basis of $300,000. The provision of section 182 of the Tax Law, requiring payment by a corporation of an annual tax "to be computed upon the basis of the amount of its capital stock employed during the preceding year within this State" should not be construed as requiring all such stock to be employed during the entire year. CERTIORARI issued out of the Supreme Court and attested on the 31st day of August, 1912, directed to William Sohmer, as Comptroller of the State of New York, commanding him to certify and return to the office of the clerk of the county of Albany all and singular his proceedings had in determining the franchise tax against the relator for the year ending October 31, 1910. Alexander & Green [Allan McCulloh and Campbell E. Locke of counsel], for the relator. Thomas Carmody, Attorney-General [Franklin Kennedy, Deputy Attorney-General, of counsel], for the respondent. LYON, J.: The relator was incorporated in December, 1875, under the laws of this State with an authorized capital stock of $500,000, only $300,000 of which was ever issued. Immediately following Third Department, September, 1913. [Vol. 158. its incorporation it purchased from the Mercantile Trust Company, which was carrying on the business of safekeeping and guaranteeing personal property in the building of the Equitable Life Assurance Society at No. 120 Broadway in the city of New York, for the sum of $200,000, the good will, business and lease of that company, and itself at once engaged in the prosecution of such business. The remaining $100,000 received from the sale of its capital stock the relator invested in dividend-paying securities and the same is still so invested. In January, 1883, the relator and the Equitable Society entered into a leasehold agreement which was the subject of later modifications, and which in October, 1900, was renewed and extended for the period of fifty years from January 1, 1901, with the privilege to the relator of a further extension of fifty years. During the months of January, April and May, 1910, the relator paid to its stockholders dividends aggregating $38,250, or 1234 per cent upon its issued capital stock. As one of the results of the insurance investigation of 1905, it appeared that the relator was paying but $23,000 yearly rental for premises the rental value of which was $95,000 per annum, and accordingly an action was brought by the new management of the Equitable Society to obtain a cancellation of this lease. The suit was settled on or about May 1, 1910, by the relator surrendering the lease and the Equitable Society paying to the relator the sum of $1,050,000 and giving a new lease for the term of twenty-five years with the privilege to either party, at any time, of terminating the lease by giving to the other party six months' notice of its desire so to do. May 2, 1910, the relator divided pro rata among its $300,000 holders of stock said $1,050,000 and in July, 1910, reduced its capital stock to $100,000. Concededly the capital stock of relator has at all times been worth at least par. In fixing the amount of the annual franchise tax to be paid by the relator under the Tax Law (Consol. Laws, chap. 60 [Laws of 1909, chap. 62], § 182) the State Comptroller deducted from the said $1,050,000 the sum of $200,000 as representing the capital of the relator invested in its lease, good will and business, being the sum at which the same had been carried App. Div.] Third Department, September, 1913. as an asset upon the books of the company, and treated the division of the same as a division of capital or assets, and treated the balance of $850,000 together with the sum of $38,250, the amount of the prior dividends declared by the relator as before stated, or the total of $888,250, as the aggre gate of the dividends made or declared by the relator during the year ending October 31, 1910, and assessed the same as the dividend paid upon $100,000 of capital stock or at the rate of 8884 per cent, and fixed the tax to be paid by relator at $22,206.25. The Comptroller having refused to revise and readjust said assessment, the relator has brought the matter before us for review. The relator in its petition for the writ of certiorari complains that the Comptroller erred in two particulars: 1. In treating $850,000 of the said $1,050,000 as a dividend made or declared within the meaning of section 182 of the Tax Law, and 2. In assessing the tax upon the sum of $100,000 as being the par value of the capital stock of the petitioner during the year ending October 31, 1910. The first ground of complaint does not seem to be well founded. The sum of $850,000 was no part of the capital but was the product of capital. It was derived from an increase in value of the assets of the company. It represented the profit of relator upon its lease, and its division among the stockholders constituted a dividend from surplus profits. (Roberts v. Roberts-Wicks Co., 184 N. Y. 257; Lowry v. Farmers' Loan & Trust Co., 172 id. 137; People ex rel. Pullman Co. v. Glynn, 130 App. Div. 332; affd., 198 N. Y. 605; Commonwealth v. Western Land & Improvement Co., 156 Penn. St. 455.) As to the second ground of complaint we think the tax should have been computed upon the basis of $300,000, as the amount of the capital stock of relator employed during the preceding year. That sum was the amount of the relator's capital stock from November 1, 1909, to July 7, 1910, a period of eight months and six days, and $100,000 was the amount of relator's capital stock from July 7, 1910, to October 31, 1910, a period of three months and twenty-four days. The dividends APP. DIV.-VOL. CLVIII. 8 |