The Souhegan Nail, Cotton and Woolen Factory vs. McConihe, 7 N.H. 309 (1834) - Opinion

contended, 1. That the clause of the act of incorporation, which purported to exempt the capital stock from taxation, was unconstitutional and void. By the constitution, every member of the munity is bound to contribute his'share towards the expert-ses of the government. Bill of Rights, Art. 12.

- In 4 N, H. Rep. 565, there is an opinion of the court, that it is unconstitutional for the legislature to assess a tax on a particular town.. A similar difficulty occurs from exempting a town, or other corporation, or a person, from taxation. It destroys the equal proportion in the same manner. If this corporation is exempted, the inhabitants must pay. greater taxes. 12 Mass. Rep. 252,. Portland Bank vs. Ap thorp.

An exemption, of all factories from taxation is altogether different from an exemption, of one particular factory. The latter is like the exemption of a single indi vidual.

2. If the provision in the charter was constitutional, this store of goods was not within the exemption. The capital stock is exempted. Buying the raw material, and manufac-taring, and selling the manufactured article, is within the legitimate powers of the corporation, and the fund used for these purposes is the capital stock. But buying and selling groceries, to the public generally, has nothing to do with manufacturing. The corporation had, in fact, no right to carry on such business. The powers of corporations extend no further than is necessary to effect, the intention of their incorporation. Angelí Sf Ames on Corp. 59, 140..

3.. The name of the corporation, is sufficiently certain. The word “ corporation” is used instead of “ factory,’'- but “ The Souhegan Nail, Cotton and Woolen,” with either of these words, sufficiently designates the owner of the property. 1 Barn. & AM. 699, The Mayor, ife. of Malden vs. Miller; Angelí Sf Ames, 387.

The plaintiffs, by their-charter, were made a “ corporation,” and there is no other corporation existing in the town, of such a character. No other corporation, therefore, than the plaintiffs, could have been intended.- This must surely be sufficient, in a case where there can, be no plea in abatement or amendment.

*3144. The warrant to the collector is itself evidence of an appointment, and this was recorded.

5. The collector is not a trespasser for not selling on the 7th of October. Nonfeasance cannot make him a trespasser.

A re-seizure may be intended on the 9th, when the property was again advertised.

The distress was kept for the space of four days after that time. The same expression occurs in the statute regulating sales upon execution, and the same rule of computing time is applicable. N. H. Laws, 103.

It is not material to enquire whether the corporation had a right, by their charter, to own and hold the store of goods.

The corporation itself, clearly, cannot be permitted to say, that it was a wrongful act for them to possess this property —was contrary to their charter — and that, therefore, they are not taxable for it, or are taxable as a company, or as individuals.

In The Gardiner C. and W. F. Company vs. The Inhabitants of Gardiner, 5 Green. Rep. 133, it was held, that the merchandize of a manufacturing corporation employed in trade in a store, was not taxable to the corporation in the town where the store was situated; but this decision cannot be an authority here, on account of a difference in the statutes of the two states.

In 1825 the legislature of this state passed an act, providing that the rateable estate belonging to any manufacturing corporation, or company, in this state, should thereafter be taxed to such corporation or company by its corporate name, and in the town or place wherein said rateable estate was situated.

It is sufficient, that this property was not in the hands of the stockholders, as individuals, and that no individual claimed or exercised ownership over it as such; and it could not be taxed to the plaintiffs as a partnership, otherwise than as it was taxed, because there was no company, or firm, other than the corporation by its corporate name.

The property was in the possession of the corporation, and the selectmen had a right to consider it as lawfully so, and treat it accordingly.

It does not appear how the invoice was taken. The statute requires the clerk, agent, or directors of a manufacturing corporation, to exhibit to the selectmen a true account of the rateable estate of which such corporation shall be possessed on the first of April. And in case they shall neglect, after being duly notified, or refuse when called on, to give a true account, on oath if required, or in case they shall fraudulently conceal some part of their rateable estate, the selectmen may for such neglect or refusal doom, or for such fraudulent concealment assess, the corporation, in the same way and manner they may by law doom or assess an individual, for such neglect or refusal, or for such fraudulent concealment of a part of his rateable estate. Laws of June session, 1825, page 70.

There is nothing here to show that some proper officer of the corporation did not give in an account of this estate; or if this was not done, it does not appear that there was not a neglect, upon which it was proper for the selectmen to doom. The case, therefore, is well enough in this respect.

The position that the property was exempted from taxation cannot be supported. “ All buildings, machinery, and ‘ capital employed, or that may hereafter be employed, in ‘ carrying on said nail, cotton and woolen factory, not ex- ‘ ceeding thirty thousand dollars, shall be exempted,” &c.

But this store of goods was neither within the words or intention of the act. 5 Green. Rep. 139.

It was not capital employed in carrying on the nail, cotton and woolen business, but in exercising the trade of a merchant. It was neither the raw material, or the manufactured article, nor a fund for the purchase of the raw material, or to be applied to the hire of laborers, although it might be sometimes, thus employed, by sales to such laborers, in common with other citizens.

If the company embarked a part of their capital in this business, it will make no difference. It would in such case be diverted from the purposes for which the exemption was granted. -.

Suppose the plaintiffs had employed their whole capital in merchandize. Could it be contended that, thus employed, it was within the exemption? Such a construction would be a fraud upon the public. And if the whole, thus employed, would not be within the exemption, neither can a part be, for the same reason, to wit, that this is not a part of the manufacturing business — -nota mode of carrying it on — - but the prosecution of another business, for the purpose of a profit.

* And while.the legislature have uniformly taxed such stock in trade, in the hands of individuals, there is no reason to suppose that they intended to grant an exemption to this corporation, to encourage them to pursue a similar business. The exemption was granted-for. the capital employed in manufacturing, in order to encourage that.

It is unnecessary, therefore, to consider whether the exemption was constitutional...

The property, then, being liable to assessment, has such assessment been legally made ?

It is objected that the assessment is erroneous — that the name of the.corporation is “ The Souhegan Kail, Cotton and Woolen Factory,” and that the assessment is made and warrant issued again-st “ The Souhegan Nail, Cotton and Woolen Corporation.”

The property was by statute to be taxed to the corporation by its corporate name. The object of this, however, was not to require that every word, syllable and letter, contained in the corporate title, should be inserted in the tax list, but to provide for a corporate, instead of an individual, taxation.

Prior to 1825, shares in manufacturing.corporations, like shares in banks, were taxed to the individual stockholders. That statute changed the rule, and' provided that all the taxable property of manufacturing-corporations should be assessed to’ the company...’ -

Suppose, the corporate name being <! The Souhegan,” <fcc., the taxhad been-assessed, omitting the article. Would-that-have vitiated the-tax ? No’ one would-attempt to maintain such a position. - -

It has been supposed that there was some analogy between a process of this character, and the ordinary process in instituting a suit by attachment or arrest, in which case, if there is a misnomer, the writ may be abated: and it is-argued, that, as the statute of jeofails does not extend to this case, there can be no amendment.

But there is in truth little more than a fancied analogy. All persons and corporations within a town owe a duty to the town. It is their duty to give in an invoice, by-a true name, and to pay the taxes assessed. So far as any analogy exists, it is to final process, where the party has neglected to plead abatement, rather than to mesne process. The taking of the invoice is the preparatory process — the making of the taxes the entering of judgment. Opportunity is given for the correction of errors, by application to the selectmen. The warrant to. collect is in fact a final process. It is, therefore, more like a case, where one summoned by a wrong name appears, and neglects to plead abatement, and has judgment against him by that name. It is true there was no opportunity to plead abatement, but there was to have mistakes corrected.

By neglecting to avail himself of this opportunity for the correction of errors, however, an individual does not preclude himself from objecting, afterwards, to any substantial defect. The requirements of the law, in all matters of substance, must be strictly pursued, before the property of an individual or corporation is taken away by such process. But, on the other hand, the selectmen should not be regarded as prosecuting an adversary suit against those upon whom it becomes their duty to assess a tax. If the requisitions of the law have been substantially complied with, mere circumstantial errors and mistakes, in matters of form, should not vitiate the proceedings.

Is this then an error of substance or form ?

In ejectment, the demise was laid to be by “ The mayor, aldermen,” &c. “ of the borough town of Malción." On the trial it turned out, from the charter, that the name of the corporation was “ The mayor,” &c. of Malden. The court held this was no variance, it appearing from the charter, which was in evidence, that Malden was a borough town. 1 Barn. & Ald. 699, Doe vs. Miller.

Although the names of corporations a.re not mere arbitrary sounds, yet if there be enough said to show that there is such an artificial being, and to distinguish it from, all others the body politic is well named, though the words and syllables are varied from: and this the rather in grants, which are to have a favorable construction. Bac. Abr.. Corporation., C. 2.

The case of The mayor and burgesses of Lynne Regis, 10 Co. Rep. 124, was founded on a bond to the plaintiffs, by that name, which varied.from the true name; and it was resolved that “ the name of a corporation, in grants or con‘veyances, need not be idem syllabis et verbis, but it is suffi- ‘ cient if it be idem re et sensu." Coke, in that case, says “ there will be found a difference between writs and grants,'and in all cases it is true, quod apices juris non sunt jura, ‘ for if a writ abates, one might of common right have a ‘ new writ, but he cannot of common right have a new bond 1 or a new lease, <fcc.” — “ So I conceive it would be reason- ‘ able, a multo fortiori, to drive him who would avoid a'writing, demise, grant, &c., made by a corporation, or to it, ‘ by reason of any verbal or literal misnomer, to shew that ‘ there are two corporations in the same city, borough, or ‘town, &c., one by the true name, and; another by such name as is contained in the deed,- &c., and to leave the ‘ deed, &c. good, by or to one of them/’ Vide also 10 Mass. Rep. 362.'.'. -.

The plaintiffs were incorporated by the name of.“The mayor and burgesses of the borough of Stafford, in the county of Stafford,” and sued by the name of “The mayor and burgesses of the borough of Stafford.” This is in abatement, and not in bar. Eyre, C. J. said — “Here wasa ‘ corporation of nearly the same name, and I think,, there- ‘ fore, on the authorities, that the nonsuit-was wrong,” 1 Bos. and Pul. 40, The Mayor, &c. vs. Bolton.

When1 a corporation is sued, if the name of the corporation is mistaken materially and substantially, the corporation cannot be-affected by' the proceedings.; There is in. these cases a'distinction made between a variance in words and syllables only, and a variance in substance. - If a corporation be sued by a name varying only in words and syllables, and not in substance,- from the true name, the misnomer must be pleaded in abatement, otherwise it will not-be regarded. But if the name be mistaken in substance, the writ cannot be regarded as against the corporation. 5, N. H. Rep. 449, Burnham vs. The Savings Bank.

The statutes of Néw-York.directed the trustees of school districts, in assessing taxes, to make out a tax list “-containing the names of all the taxable inhabitants,” &c.,.and a tax-assessed to “ The widow and heirs, of A, B., deceased,” for a farm which was owned and actually possessed by such widow and heirs, was held sufficient to justify the collector in executing his warrant, 10 Wendell’s Rep. 340, Wheeler vs. Anthony.

As no plea in abatement caribe interposed to a warrant for the collection of a tax, it would seem that an objection of misnomer in the assessment of such tax,- or rather that the tax was not assessed against the corporation,.should be founded upon a substantial variance, and not one, of mere words and syllables. If there is no plea of abatement, there should be no law of abatement.

The reason given for a distinction between leases, bonds, &,e., and writs, well applies in such ease. If the objection is held fatal, the tax is wholly lost. There is no giving of a better process.

That the corporation, in this case, is substantially described by its corporate name, cannot be doubted. Although the word “ factory” is omitted, no one would read it without understanding that it was a manufacturing corporation: and it is not suggested that there was in the town any other corporation of a like description.

How far the same doctrine can be applied to taxes against individuals, we are not now called upon to decide. It would seem that a tax against John Doe, when the individual intended ivas John W. Doe, and there was no other person of a similar name in town, which is a case nearly analogous to this, would not present such a substantial misdescription that it must necessarily fail; although a total mistake and misdescription of the Christian or símame might render it void. 6 D. & E. 234, Cole vs. Hindson; 2 Camp. 270, Scandover vs. Warne; 8 East, 328, Shadgett vs. Clipson; 4 Wend. 555; 6 Cowen 456; 7 Cowen 332.

It is farther objected, that there is no sufficient evidence of the appointment of the collector. He was appointed by the selectmen, in pursuance of the statute, the town having neglected to elect one. That the appointment should in some way appear of record, is true. But there is no particular form for a record in such case — and the warrant granted to him, which is his commission for collecting the taxes, and which of course must have been recorded in the town records, being under the hands and seal of the selectmen, is a sufficient evidence of an appointment by them, the town having neglected to elect. 2 N. H. Rep. 205.

If it did not appear that the town had so neglected, this might not have been proper evidence of an appointment, as the ease might have presupposed other and better, that is, a record of an election.

A distinct record of the appointment would be more formal, and is to be preferred.

Another objection is, that the proceedings of the defendant were unlawful. It is urged, that after four days from the seizure on the third of October, the cloth being in the actual possession of the agent of the corporation, the collector could not have a constructive possession, and that he had, therefore, no possession from that time until the day of sale — -and did not keep the distress four clays.

But it is apparent, that although in the actual possession of the agent, it was held for the collector, for it is given up to him by the agent when called for. Had the agent, after four days, claimed to hold the cloth for the company, and the collector seized it again on the day of sale, it might have presented a different question.

It is further urged, that after the seizure of the property, and an advertisement of it by the collector, if the property is to be considered in his possession constructively, he did not sell at the expiration of four days, but proceeded to advertise a second time, and sell on a subsequent day, six days after he had any right.

But it is settled that the keeping of the goods beyond the time prescribed by the statute, is mere nonfeasance, which will not make the collector a trespasser. 3 N. H. Rep. 69, Ordway vs. Ferrin; 15 Johns. 402, Gardner vs. Campbell.

And it is difficult to conceive how the subsequent sale, if the property was duly advertised, being made in pursuance of the command in the warrant, can be such an abuse of his authority as to make him a trespasser ab initio.

It is, therefore, unnecessary to consider whether the second advertisement might be regarded as a re-seizure. If it might be, the objection that it did not appear that the distress was kept for the space of four days from that time (the advertisement being on the 9th and the sale on the 13th) must. fail,. for the reason suggested, in the argument of the defendant’s counsel. The same expression Occurs in the statute relative to sales of personal property on execution: and it has never been supposed that the statute prescribing the manner of.sales by collectors intended to introduce any new rule of computing time. The day of the seizure is to be regarded as one, and the distress was of course kept for the space of four days after the second advertisement, before the sale. But this is not material to the decision of this case.

I am of opinion.that the verdict should be set aside.