The opinion of the court was delivered by
Van Dyke, J.
The plaintiffs are a corporation, chartered by the legislature of the state. By the affidavits, taken under the order of the court, and which are not controverted, it appears that their capital originally paid'in was $361,000, but through losses of various kinds, their works having been twice destroyed by fire, their stock has become reduced in value from $25 per share to five dollars per share, which would reduce the value of the $361,000 paid in to $72,200, yet the assessor has assessed them on the sum of $361,000, originally paid in, and not on the present actual value of their property; and whether this assessment on the full sum paid in is right or not, is the question for our consideration.
The assessment was evidently made in a supposed obedience to the directions of 'the 8th section of the act of March 28th, 1862, which enacts “that all private corporations of this state, except those which, by virtue of any irrepealable contracts in their charters, or other contracts with this state, are expressly exempted from taxation, shall be, and are hereby required to be respectively assessed and taxed at the full amount of their capital stock paid in and accumulated surplus.”
If the act contained nothing else on the subject but this, however unreasonable and unjust it might seem, I would feel myself constrained to sustain the construction put upon it by the assessor. But to give the 8th section this construction, is to bring us into direct conflict with the language of the 7th section, which is quite as explicit and positive, far more controlling and far less dubious in its character, than the 8th section. The 6th section relates merely to a poll-tax, but the 7th section is the .first one which defines and describes the kind of property which is liable to taxa[407]*407tion. Without entering into minute specifications of the objects of taxation, it lays down the broad, clear, and universal rule, which is eminently just, that all property within the state, of every kind and description, whether real or personal, and whether belonging to individuals or corporations, shall be liable to taxation subject to certain exemptions mentioned, and that this property shall be assessed at the full and actual value thereof. The section reads as follows: “ That all real and personal estate within this state, whether owned by individuals or corporations, shall be liable to taxation, in the manner, and subject to the exemptions herein after specified, and shall be assessed at the full and actual value thereof, at such rate per Rollar as to raise,” &c.
Now it is very manifest, in the case before us, that the ■assessor assessed the property of this corporation at its full value ■ but it is equally manifest that he did not assess it at its actual value, which is contrary to the clear intention and •express language of the 7lh section.
After passing over several sections, mostly containing directions as to the mode and manner in which the assessment is to be made, we reach the 14th section, which is the last on that subject, and in which the duties of the assessor in that respect seem to be summed up, adding the tests by which he is to ascertain the full and fair value of all the property, which he is required to assess under the act. That section enacts, “ that it shall be the duly of the assessors, in assessing any property to be assessed under this act, to assess and value such ■property at its full and fair value, and at such price as in his judgment said property would sell for, at a fair and bona fide sale by private contract at the time such assessment is made; ■and every assessor shall annex to his duplicate an oath or affirmation, in writing, to be taken before any person authorized to administer an oath or affirmation, that all assessments in the said duplicate contained, have been made according to the requirements of this section.”
Now this section not only requires each assessor to make every assessment which he makes under this act, according [408]*408to the requirements of this 14th section, that is, to assess all property at its full and fair valuation, and at such price as-in his judgment it would sell for, at a fair and bona fide sale by private contract, at the time of making the assessment; but it also requires him to add to them his oath or affirmation that he has so made them according to that section. But the assessor certainly did not assess this corporation or its property according to the directions and requirements of this section. He says himself, in his evidence, that he did not so assess it, but that he did assess it upon its capital stock paid in, irrespective of'its market value, and that he-did not stop to inquire whether it was above or below par. He obtained his information of the capital paid in of the officers of the company, and -was informed by them of their condition and of the reduced and low condition of their stock, but made the assessment as he did because he deemed it his duty so to do. Now can it be supposed that the legislature ever intended to make such a hard and cruel distinction against poverty, and in favor of wealth, even among corporations themselves, as this cpnstruction of the assessor seems to claim.
Can we suppose that the legislature meant to tax one corporation, which still retains all its capital paid in, and has lost nothing, simply on the full amount of,such capital, and at the same time to tax another corporation which has lost next to everything, on the same amount of paid in capital, on the ground that it had once owned it, but which, from accident by flood, or fire, or tempest, or other unavoidable cause, had long since been_swept from existence?
The capital of a company may be reduced so low that to-compel it to pay a single tax assessed on the whole amount paid in would exhaust every vestige of property that remained, and I do not see, if the construction contended for be correct, why the assessors are not required to search out every broken bank, and every bankrupt turnpike company, and every bankrupt mining and manufacturing company and railroad company which has been legally organized in the [409]*409state, and not legally dissolved, and assess them at the full amount of their capital stock paid in; for it seems, according to this construction, that whether a corporation still possesses all the capital that was once paid in, or whether it possesses only a part of it, or whether it possesses no part of it, are questions about which the assessors have no right or power to inquire, but must simply assess it at its full amount of capital stock paid in, -without regard to any other consideration whatever.
There may be corporations still doing business, whose paid in capitals are as thoroughly sunk and gone as those which have ceased to do business. Why should they not all be treated alike, and taxed either on their paid in capitals or not taxed at all? And if the assessor can inquire whether their capitals be wholly gone, why may he not inquire if they be but partly gone ? for the question, whether a corporation is taxable or not, does not, it seems, depend on whether its paid in capital is still preserved or not, or only a part or none of it, but simply whether it is a corporation or not which once had a paid in capital. If it be, the assessor must assess it on the full amount of the capital so paid in.
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The opinion of the court was delivered by
Van Dyke, J.
The plaintiffs are a corporation, chartered by the legislature of the state. By the affidavits, taken under the order of the court, and which are not controverted, it appears that their capital originally paid'in was $361,000, but through losses of various kinds, their works having been twice destroyed by fire, their stock has become reduced in value from $25 per share to five dollars per share, which would reduce the value of the $361,000 paid in to $72,200, yet the assessor has assessed them on the sum of $361,000, originally paid in, and not on the present actual value of their property; and whether this assessment on the full sum paid in is right or not, is the question for our consideration.
The assessment was evidently made in a supposed obedience to the directions of 'the 8th section of the act of March 28th, 1862, which enacts “that all private corporations of this state, except those which, by virtue of any irrepealable contracts in their charters, or other contracts with this state, are expressly exempted from taxation, shall be, and are hereby required to be respectively assessed and taxed at the full amount of their capital stock paid in and accumulated surplus.”
If the act contained nothing else on the subject but this, however unreasonable and unjust it might seem, I would feel myself constrained to sustain the construction put upon it by the assessor. But to give the 8th section this construction, is to bring us into direct conflict with the language of the 7th section, which is quite as explicit and positive, far more controlling and far less dubious in its character, than the 8th section. The 6th section relates merely to a poll-tax, but the 7th section is the .first one which defines and describes the kind of property which is liable to taxa[407]*407tion. Without entering into minute specifications of the objects of taxation, it lays down the broad, clear, and universal rule, which is eminently just, that all property within the state, of every kind and description, whether real or personal, and whether belonging to individuals or corporations, shall be liable to taxation subject to certain exemptions mentioned, and that this property shall be assessed at the full and actual value thereof. The section reads as follows: “ That all real and personal estate within this state, whether owned by individuals or corporations, shall be liable to taxation, in the manner, and subject to the exemptions herein after specified, and shall be assessed at the full and actual value thereof, at such rate per Rollar as to raise,” &c.
Now it is very manifest, in the case before us, that the ■assessor assessed the property of this corporation at its full value ■ but it is equally manifest that he did not assess it at its actual value, which is contrary to the clear intention and •express language of the 7lh section.
After passing over several sections, mostly containing directions as to the mode and manner in which the assessment is to be made, we reach the 14th section, which is the last on that subject, and in which the duties of the assessor in that respect seem to be summed up, adding the tests by which he is to ascertain the full and fair value of all the property, which he is required to assess under the act. That section enacts, “ that it shall be the duly of the assessors, in assessing any property to be assessed under this act, to assess and value such ■property at its full and fair value, and at such price as in his judgment said property would sell for, at a fair and bona fide sale by private contract at the time such assessment is made; ■and every assessor shall annex to his duplicate an oath or affirmation, in writing, to be taken before any person authorized to administer an oath or affirmation, that all assessments in the said duplicate contained, have been made according to the requirements of this section.”
Now this section not only requires each assessor to make every assessment which he makes under this act, according [408]*408to the requirements of this 14th section, that is, to assess all property at its full and fair valuation, and at such price as-in his judgment it would sell for, at a fair and bona fide sale by private contract, at the time of making the assessment; but it also requires him to add to them his oath or affirmation that he has so made them according to that section. But the assessor certainly did not assess this corporation or its property according to the directions and requirements of this section. He says himself, in his evidence, that he did not so assess it, but that he did assess it upon its capital stock paid in, irrespective of'its market value, and that he-did not stop to inquire whether it was above or below par. He obtained his information of the capital paid in of the officers of the company, and -was informed by them of their condition and of the reduced and low condition of their stock, but made the assessment as he did because he deemed it his duty so to do. Now can it be supposed that the legislature ever intended to make such a hard and cruel distinction against poverty, and in favor of wealth, even among corporations themselves, as this cpnstruction of the assessor seems to claim.
Can we suppose that the legislature meant to tax one corporation, which still retains all its capital paid in, and has lost nothing, simply on the full amount of,such capital, and at the same time to tax another corporation which has lost next to everything, on the same amount of paid in capital, on the ground that it had once owned it, but which, from accident by flood, or fire, or tempest, or other unavoidable cause, had long since been_swept from existence?
The capital of a company may be reduced so low that to-compel it to pay a single tax assessed on the whole amount paid in would exhaust every vestige of property that remained, and I do not see, if the construction contended for be correct, why the assessors are not required to search out every broken bank, and every bankrupt turnpike company, and every bankrupt mining and manufacturing company and railroad company which has been legally organized in the [409]*409state, and not legally dissolved, and assess them at the full amount of their capital stock paid in; for it seems, according to this construction, that whether a corporation still possesses all the capital that was once paid in, or whether it possesses only a part of it, or whether it possesses no part of it, are questions about which the assessors have no right or power to inquire, but must simply assess it at its full amount of capital stock paid in, -without regard to any other consideration whatever.
There may be corporations still doing business, whose paid in capitals are as thoroughly sunk and gone as those which have ceased to do business. Why should they not all be treated alike, and taxed either on their paid in capitals or not taxed at all? And if the assessor can inquire whether their capitals be wholly gone, why may he not inquire if they be but partly gone ? for the question, whether a corporation is taxable or not, does not, it seems, depend on whether its paid in capital is still preserved or not, or only a part or none of it, but simply whether it is a corporation or not which once had a paid in capital. If it be, the assessor must assess it on the full amount of the capital so paid in. But I cannot suppose that any such intention was ever entertained by the legislature, or that we can put any such construction upon their acts.
I presume the legislature were sufficiently discriminating against partially exhausted corporations, as between them and individuals, when they permitted the latter to deduct their debts from the valuation of their taxable property, but refused it to the former, without taxing them for property which they did not own. Can we possibly suppose that the legislature ever intended to tax any persons, either natural or artificial, for property which they did not own? And yet this is precisely what the 'assessor has done in the case before us. He has taxed these plaintiffs with $288,800 worth of property which they have not got, and which they do not own.
What, then, is the true interpretation of these three sec[410]*410tions, which at first view present some appearance of conflict? They seem to me to be quite consistent with each other, when properly read and understood. The 7th and 14th are entirely so, and the 8th effects in the end the-same result precisely. All three tax property, though by a somewhat different process, exactly at its true and actual value. The 7th and 14th do so directly, by taxing. all the property which corporations own; and the 8th, by taxing the paid in capital and surplus in that form, exactly reaches and taxes all the property which corporations of that class actually own, for their capitals and surplus embrace all the property which they can own. For this reason, I think the 8th section is quite unnecessary, as the same result would be reached, if the corporations mentioned in the 8th section were taxed according to the provisions of the 7th section.
The legislature, having abandoned the idea of taxing the stock of corporations in the hands of individual stockholders,, have determined, instead, to reach and tax it in the hands, of the corporations themselves. In the 7th section, it is called estate real and personal. In the 8th, it is termed capital stock, and in the 14th, the term property is used. But these expressions all mean the same thing. A corporation has no capital stock of any value, except what is represented by the property which it owns, either real or personal, and in the 7th section provision is made for taxing all their capital stock by taxing all their property, real and personal, and this provision would also extend to and include all their accumulated surplus; for accumulated surplus can only consist of the undivided profits which the company has earned or acquired, and still has on hand, and is necessarily embraced in the property of some kind which the corporation owns.
The 7th section, as already remarked, is sufficiently broad, as well as explicit, to cover all classes and cases of taxable corporations; but the legislature evidently supposed that the [411]*411real amount and value of the property of those corporations whose capitals were still full and unimpaired, and especially if they had an accumulated surplus besides, could be much easier, as well as much more certainly l'eached, by taxing such capital and surplus directly and in that form, than by attempting to search out all the particular items and parcels of such property, wherever it might happen to be found; and they accordingly, in the 8th section, gave directions to the assessors, that in assessing all private corporations which still had their paid in capitals, and also an accumulated surplus, to assess them directly and at once on such capital and surplus.
But all this is neither inconsistent nor in conflict with the 7th and 14th sections, which require that all the property of corporations, as well as of individuals, shall be assessed at its full and actual value. The 8th section only prescribes the particular manner- in which the property of a certain class of corporations shall be assessed, viz. by assessing their paid in capital and accumulated surplus.
But it does not apply to any other corporations. The section, in terms, only refers to those corporations which have, a surplus. There can be no such thing as an accumulated surplus unless the paid in capital is kept good. The earnings and profits of a corporation must be used to meet its losses and expenses first, and if they do not do this and more, so that the assets and property show a balance over and above the paid in capital, there can be no surplus. The directions in the 8th section can only, and do only apply to such corporations as these. Hence the 7th and 14th are not disturbed by it.
It was quite useless, if not absurd, for the 7th and 14th sections to direct, that all the estate and property of corporations should be assessed at its full, fair, and actual value, if such assessments were all to be controlled by the 8th section; for, according to that section, if that is to prevail, their property is not assessed at its full, fair, and actual value; but [412]*412the corporation, whose property is still worth all the capital that ever was paid in, is taxed just as much, and no more, as the corporation whose property and assets are reduced in value to next to nothing. I cannot admit the existence of •such an absurdity in the act.
It appears very much as if the legislature, after having for a special reason introduced the 8th section, fearing that .some misapprehension might arise, to remove all doubt, added the 14th section, thereby reaffirming the principles of the 7th section, furnishing the mode by which the assessor was to ascertain the true value of the property assessed, and requiring him to add his oath or affirmation that he had made .all of his assessments according to the provision of the last named section. And yet the assessor, in the case before >us, with these two sections in full view, has assessed these plaintiffs for $366,000 worth of property, when it clearly appeared to him that they only owned $72,200 worth. This, I think, was certainly wrong, and the assessment should be reduced.
The cases of The Washington Manufacturing Company, The Kaighn’s Point Ferry Company, The Camden Water Works Company, The West Jersey Ferry Company, and The •Camden and Philadelphia Ferry Company, were all argued .at the same time, and are to be governed, it is agreed, by the .same principles. The assessments in these cases, also, should be reduced.