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corporation, and, for the purpose of equalizing the capital and surplus of the merging companies, $200,000. was returned to the former's stockholders, that amount was not a dividend, within Tax Law, § 182 (Laws 1896, p. 856, c. 908), providing for the taxing of corporations on the basis of dividends made and declared on capital stock, especially in view of Stock Corporation Law, § 23 (Laws 1890, p. 1071, c. 564, as amende'l by Laws 1901, p. 965, c. 354), providing that the directors of a stock corporation shall not make dividends except from the surplus profits arising from
the business of the corporation. Certiorari by the people, on the relation of the North American Trust Company, against Erastus C. Knight, as Comptroller of the state of New York, for the revision of his determination of relator's taxes. Modified.
The relator is a domestic corporation with a paid-up capital stock of $2,000,000. On January 1 and July 1, 1900, it paid dividends of 242 per centum on such capital, aggregating 5 per centum for the year. In August and September, 1899, its stockholders paid into its treasury in cash the sum of $500,000, for the purpose of having that sum added to the surplus of the company. Thereafter, and on May 1, 1900, there was a merger between the relator and the International Banking & Trust Company. The company after the merger continued the business in the name of the relator, the same as before. Prior to such merger there was an audit of the accounts and books of the relator, which showed that its surplus and undivided profits were greater in proportion to its capital than the surplus and undivided profits of the International Banking & Trust Company. For the purpose of making an equalization of the proportion, and about May 1, 1900, $200,000 was returned by the relator to its stockholders. The Comptroller has regarded that as a dividend of 10 per cent. upon its capital stock, which, added to the dividend of 5 per cent. above mentioned, makes 15 per cent. for the year. He assessed the capital stock for the year in question at a valuation of $1,508,440, and upon this a tax was imposed of one-fourth of a mill for each 1 per centum of dividends; that is to say, a tax of 334 mills upon dividends of 15 per cent., making a total tax of $5,656.65. This writ is brought to review the denial of the ap plication of the relator for a revision or readjustment of such account for taxes.
Argued before PARKER, P. J., and SMITH, CHASE, CHESTER, and HOUGHTON, JJ.
Edmund L. Cole, for relator.
John Cunneen, Atty. Gen., and William H. Wood, Dep. Atty. Gen., for respondent.
CHESTER, J. The relator makes no question as to the valuation placed upon the capital stock. Its sole contention is that the $200,000 returned to the stockholders were not dividends, within the meaning of that word as used in section 182 of the tax law, under which the tax was imposed (Laws 1896, p. 856, c. 908); that consequently the dividends for the year in question were only 5 per cent. on the capital stock, instead of 15 per cent.; and therefore that the rate of taxation should be reduced from 334 mills for each 15 per cent. to 1/2 mills upon the capital stock subject to taxation under said section.
While there was proof before the Comptroller that before the merger the surplus of the relator was $1,200,000, made up of $500,000 cash contributed by its stockholders and $700,000 earnings of the relator, yet the proof is also entirely clear and undisputed that such $200,000 returned to the stockholders during the year in question and 123 New York State Reporter was not from any such earnings, but was a return to them of a part of their cash contribution to such surplus, made prior to the merger. When such contribution was made, no additional stock was issued for it, and it simply went to add to the value of the stock already held by those so contributing.
Section 23 of the stock corporation law (Laws 1890, p. 1071, c. 564, as amended by Laws 1892, p. 1829, c. 688) provides that “the directors of a stock corporation shall not make dividends, except from the surplus profits arising from the business of such corporation.” It seems to me clear that the $200,000 so returned cannot fairly be regarded as from the “surplus profits” of the company, for it did not in any sense arise from its profits or earnings in the course of its business, but was contributed solely for the purpose of strengthening the company and adding to its working capital. That being so, it was not a dividend, within the meaning of the law.
We think, for these reasons, that the Comptroller should have revised the account for taxes in accordance with the contention of the relator, and should have modified the tax by imposing it at the rate of 1/2 mills instead of 334 mills.
The determination of the Comptroller should be modified by reducing the tax to $2,262.66, and, as so modified, affirmed, with $50 costs and disbursements to the relator. All concur.
(96 App. Div. 130.)
HADOOCK V. CITY OF GLOVERSVILLE,
(Supreme Court, Appellate Division, Third Department. June 30, 1904.) 1. NUISANCE-RELIEF-REMOVAL.
Under Code Civ. Proc. $ 1662, providing that a judgment for plaintiff in an action for a nuisance may award him damages, or direct the removal of the nuisance, or both, the court is not bound to grant both classes of relief ; but the nuisance being the pollution of a stream, participated in by others than defendant city, whose sewer enters the stream, and an injunction having already issued against it to cease such pollution, and the operation of such injunction having been suspended for a reasonable time to enable the city to comply therewith, and no lack of good faith in endeavoring to comply in a reasonable time with the injunction appearing, the court is justified in denying, in the action for the nuisance, the removal thereof, granting damages only. Appeal from Trial Term, Fulton County.
Action by Mary Hadcock against the city of Gloversville. From so much of the judgment as adjudged that plaintiff was not entitled to judgment directing removal of a nuisance, plaintiff appeals. Affirmed.
The action is one for a nuisance. In the prayer for relief in the complaint the plaintiff demands judgment that the nuisance be removed, and that the plaintiff recover the damages caused by the nuisance. The trial resulted in a verdict directed by the court, that the defendant has maintained the nuisance as alleged in the complaint, and for such damages as the jury may determine plaintiff has suffered thereby. The jury assessed such damages at the sum of $8.32. The court denied the motion of the plaintiff's counsel to direct a verdict that the plaintiff is entitled to have such nuisance removed, to which denial plaintiff excepted. The denial of that relief brings up the sole question for determination.
The nuisance alleged in the complaint was caused in part by the defendant's depositing the sewage from its sewer system into the Cayadutta creek, which caused an accumulation of noxious matters upon the premises of the plaintiff, from which foul and noxious odors arose, to the plaintiff's discomfort and damage. Plaintiff's premises are situated upon a canal located in the city of Johnstown, which taps such creek at a point about half a mile from her premises. The creek and canal in question are also polluted by the sewage of the city of Johnstown and by that of a large number of tanneries, so that at least two-thirds of the alleged nuisance arises from sources for which the defendant is not responsible.
Argued before PARKER, P. J., and SMITH, CHASE, CHESTER, and HOUGHTON, JJ.
Andrew J. Nellis, for appellant.
CHESTER, J. The theory of the appellant in support of her contention that she is entitled to a judgment directing the removal of the nuisance is that the action is one at law, and, the court having directed a verdict that the defendant was maintaining a nuisance, that she was entitled to the other relief demanded as a matter of course, that the court had no discretion in the matter, and therefore could not lawfully deny her that relief. Whatever force there may have been in this contention under the common law or under the writ of nuisance as it was continued under the Revised Statutes, it has no force under the Code of Civil Procedure. The Revised Statutes contained the following provisions :
“The common law remedy by writ of nuisance is retained as heretofore accustomed, subject to the provisions herein contained.” 2 Rev. St. (1st Ed.) p. 332, pt. 3, c. 5, tit. 4, § 1.
“The judgment upon a writ of nuisance, in case the plaintiff shall prevail, shall be as heretofore accustomed, that the nuisance be removed, and that the plaintiff recover the damages occasioned thereby.” 2 Rev. St. (1st Ed.) p. 333, pt. 3, c. 5, tit. 4, 8 7.
But on the enactment of the Code of Procedure a radical change was wrought which abrogated the requirement that both classes of relief should be given in cases of this kind. By that Code it was provided in section 453 that "the writ of nuisance is abolished," and in section 454 that “injuries heretofore remedial by writ of nuisance are subjects of action, as other injuries, and in such action there may be judgment for damages, or for the removal of the nuisance, or both.” These provisions, in substance, are continued in the Code of Civil Procedure, where it is provided in section 1660 that "an action for a nuisance may be maintained in any case, where such an action might have been maintained under the laws in force, immediately before this act takes effect," and in section 1662 that "a final judgment in favor of the plaintiff, may award him damages, or direct the removal of the nuisance, or both.” In view of the fact that the writ of nuisance was never favored by the courts, and was regarded as antiquated and obsolete (Clark v. Storrs, 4 Barb. 562; Brown v. Woodworth, 5 Barb. 550; Ellsworth v. Putnam, 16 Barb. and 123 New York State Reporter 568), the reasons for the change in law wrought by the Code of Procedure, and continued by the Code of Civil Procedure, are apparent. The effect of this change is to give the court the power either to award damages, or to remove the nuisance, or to grant both classes of relief, and this power is given in express and unambiguous terms, leaving no room for construction.
We think, too, that the court, under the circumstances of this case, wisely refrained from granting the relief contended for by the appellant upon this appeal. Neither the court below nor this court could be blind to the fact that the defendant, which is polluting this stream with its sewage, is now and was at the time of the trial under a mandatory injunction to cease such pollution, nor to the fact that because it was confronted with a difficult sanitary and engineering problem, requiring a considerable time for its proper solution, the court had exercised its discretion to suspend the operation of such injunction for a reasonable time in order to enable the defendant to comply therewith. Sammons v. City of Gloversville, 34 Misc. Rep. 459, 70 N. Y. Supp. 284, affirmed 67 App. Div. 628, 74 N. Y. Supp. 1145; Sammons v. City of Gloversville, 81 App. Div. 334, 81 N. Y. Supp. 466, affirmed 175 N. Y. 346, 67 N. E. 622 ; Warren v. City of Gloversville, 81 App. Div. 291, 80 N. Y. Supp. 912. Nothing appears in this record to show any lack of good faith on the part of the defendant in its endeavors to comply within a reasonable time with the injunction which has gone against it. Where a city of considerable size is confronted with such a problem, and where the immediate damming up of the sewers flowing into the Cayadutta creek would result in a great menace to the public health, and where the defendant alone is not the sole offender in polluting the stream, and in a case where an injunction has already run against the defendant to the same effect as the relief sought here, the court was fully justified, under the alternative power given to it by section 1662 of the Code of Civil Procedure, in denying so much of the relief as it did to the plaintiff in this case.
The judgment appealed from should be affirmed, with costs. All concur.
(96 App. Div. 69.)
HIGGINS V. UNITED TRACTION CO.
(Supreme Court, Appellate Division, Third Department. June 30, 1904.) 1. EXPERTS-OPINION EVIDENCE-SPECULATIVE DAMAGES.
In an action for injuries, a question asked of a medical expert as to whether an injury, such as plaintiff received on the day in question, would be "likely to produce the condition" related to the witness, was objectionable as calling for speculative evidence on the issue of damages.
Parker, P. J., dissenting.
Action by Jennie Higgins against the United Traction Company. From a judgment in favor of plaintiff, and from an order denying defendant's motion for a new trial, it appeals. Reversed.
The plaintiff has sued the defendant for damages for negligence. Her claim is that, in alighting from one of the defendant's cars, the car started up before she had left the same, thereby throwing her to the ground and injuring her. The jury rendered a verdict in her favor for $1,000. From the judgment entered upon this verdict, and from an order denying defendant's motion for a new trial, this appeal is taken.
Argued before PARKER, P. J., and SMITH, CHASE, CHESTER, and HOUGHTON, JJ.
Patrick C. Dugan, for appellant.
SMITH, J. Upon the trial of this action one Morris, a physician, was called in behalf of the plaintiff. In a hypothetical question, which assumed as true certain facts claimed to have been proven by the plaintiff, he was asked: "What would you say produced the condition in which you found this woman upon your examination ?" To this he answered: “An injury could produce that condition." Thereupon the witness was asked by plaintiff's attorney: "Would an injury such as she received upon that day be likely to produce the condition which I have related to you?" This was objected to hy defendant's counsel as speculative, incompetent, inadmissible, and not based upon a reasonable certainty, or upon the facts proven. The objection was overruled, the defendant excepted, and the witness answered: “I say, yes; it would.”
In Strohm v. N. Y., L. E. & W. R. R. Co., 96 N. Y. 305, Rapallo, J., in writing for the court, says:
"Consequences which are contingent, speculative, or merely possible are not proper to be considered in ascertaining the damages. It is not enough that the injuries received may develop into more serious conditions than those which are visible at the time of the injury, nor even that they are likely to so develop. To entitle a plaintiff to recover present damages for apprehended future consequences, there must be such a degree of probability of their occurring as amounts to a reasonable certainty that they will result from the original injury.”
In Bellemare v. Third Avenue Railroad Company, 46 App. Div. 557, 61 N. Y. Supp. 981, the headnote reads:
"In an action to recover damages for personal injuries, it is improper to permit a physician, who examined the plaintiff some three years and eight months after the accident, and found that certain ribs on his left side were fractured, to testify, in answer to the question as to whether the injuries would be permanent, that there is likely to be a certain loss of strength of the affected side, but the principal danger lies in the complications that may result from chronic pleurisy, which exists in this man's case, and that such complication 'is liable to occur; it may and may not,' as suchi testimony is conjectural and speculative; there being no reasonable certainty that the anticipated consequences will result.”
In that case the Strohm Case was referred to and relied upon, the court holding that it is not proper to testify as to consequences which "are likely to develop.” While the term “likely” has in it to a certain extent an element of probability, it thus seems to have been held that it is not strong enough to make proper evidence facts which are likely to occur. The holding seems to be that there should be a stronger indication of a probability to a reasonable degree of certainty before a jury could be authorized to award damages therefor. For this error the judgment must be reversed.