George Crane Morehouse.

The supervisors' manual : a practical treatise on the law applicable to the duties of supervisors from the date of their election to the end of their official term; also, the law relative to town bonds, railroad aid bonds, defective roads and bridges, town meetings, assessment and collection of taxe online

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Online LibraryGeorge Crane MorehouseThe supervisors' manual : a practical treatise on the law applicable to the duties of supervisors from the date of their election to the end of their official term; also, the law relative to town bonds, railroad aid bonds, defective roads and bridges, town meetings, assessment and collection of taxe → online text (page 33 of 96)
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People, ex re2.Twenty-tbird St. R, Co., v. Commissioners, 95 N, Y. 664. See { 401,
.post.

In proceedings instituted under chapter 269 of 1880, to review an assessment of
real estate belonging to the relator, it is proper to make the test of the value
of the property for assessment for the purposes of taxation, to consist in its
earning capacity, rather than to adopt for that purpose the cost of its construc-
tion, not that its earning capacity should be taken as an absolute test of its value,
but that it should be treated as an element in the problem, and as a safer and
more just guide than is the cost of construction.

This is especially the case when estimating the value of the real estate of a
railroad, when the road is of small intrinsic value as compared with its original,
actual cost.

People, ex rel., v. Keator, 36 Hun, 592.

In proceedings instituted by the relator, a railroad company, to review an assess-
ment made by the town assessors, the court at a special term reduced the as.sess-
ment imposed upon the main track of the relator upon the ground that certain
sums should have been deducted from the earnings of the relator in determining
its net earnings.



COKPO RATIONS — ASSESSMENT AND TAXATION OF. 301

Tlie method adopted by the court was based upon the a/eerage of the earnings
tat the preceding five years, and consisted in deducting from the gross earnings:

1. The net earnings of its freight cars on other roads;

2. The value of the use of its freight cars on its own road at the same rate;

3. The amount received fromrentals of its real property not used in its business;

4. Interest at the rate of five per cent upon the value of its side tracks;

5. Interest at the rate of five per cent upon the value of its coaches and cars,
other than freight cars;

6. Interest at the rate of five per cent on the value of its locomotives;

7. Interest at the rate of five per cent upon the value of its depots, docks, sheds
and lands outside of the main track not rented but used in its business.

This residue was capitalized at five per cent, and that sum divided by the num-
ber of miles in length of such track, was fixed upon as its value per mile.

Held, that in the absence of any evidence tending to show that the results of
the five years' business did not fairly indicate its present financial importance, or
of mismanagement tending to show that the earnings failed to represent reason-
ably the productive character of the road, or that there existed undeveloped fa-
cilities upon which to found, or which necessarily required an estimate of present
value in addition to that produced by the net earnings, the general term could
not say that the method of estimate adopted by the special term was erroneous.

The length of the relator's road, including its branches and leased lines, was
417 8-100 miles, of which that of the leased lines was 36 58-100, and that of its
other branches 96 37-100. The rent paid for the leased lines exceeded largely
their net earnings. To ascertain the value per mile the court divided the sum of
the capitalized average net earnings per annum for the five years by the whole
number of miles of road, less the leased lines.

Held, that it did not err in so doing.

People. «a! «?. Eome, W. &0. E. E. Co., v. Hicks, 40 Hun, 598; affirmed, 105
N. Y. 198.

It is proper for assessors in vahiing the property of a railroad corporation in
their town liable to assessment, to take into consideration the verified reports of
the company as to earnings, made as required by law.

It seems that assessors are not required to apply the rigid rules of evidenee in
itivestigations before them where assessments are contested.

People, exrd. R., W. & 0. R. E. Co., v. Hicks et at., 105 N. T. 198.

§ 391. Foreign Railroads. — AH corporations formed
under the provisions of the "Act to authorize the formation of cor-
porations for the purpose of acquiring, constructing and operating
railroads in foreign countries," shall be subject to taxation upon the
amount of the real or personal property owned by such corporations
within this State.

Laws of 1881, chap. 468, 8 13; People v. Equitable Trust Co. of New London, 96
N. Y. S87.

Consolidated Companies.— It shall and may be law-
ful for any railroad company or corporation, organized under the
laws of this State, or of this State and any other State, and ope-
rating a railroad or bridge, either wholly within, or partly within,
and partly without this State, to merge and consolidate its capital
stock, franchises and property with the capital stock, franchises and
property of any other railroad company or companies organized un-



302 Supervisors' Manual.

der the laws of this State or under the laws of this State and any
other State, or under the laws of any other State or States when-
ever the railroads or branches, or any part of the railroad or branches
of the companies or corporations so to be consolidated, shall or may
form a continuous or connected line of railroad with each other, or
by means of any intervening railroad bridge or ferry.

Chap. 917, § 1, of 1869, as amended by chap. 685, of 1881 .

Assessment of Real and Personal Property
of Xe\r Corporation in this State. — The real estate
of such new corporations, situate within this State, shall be assessed
and taxed in the several towns and cities where the same shall be
situated in like manner as the real estate of other railroad corpora-
tions is, or may be taxed and assessed, and such proportion of the
capital stock and personal property of such new corporation shall in
like manner be assessed and taxed in this State, as the number of
miles of its railroads situate in this State bears to the number of
miles of its railroad situate in the other State or States.

Chap. 917, § 6, of 1869.

§ 392. Railroad— Personal Property.— The per-
sonal property of a railroad is to be assessed in the town, or ward
where the principal business office is located.

In assessing such property, the same rules prevail as in taxing
and assessing the personal property of other corporations for such
property.

See poit.

The officers of railroad corporations shall, on or before the first of
July in each year, deliver to the assessors of any town or ward,
where they are liable to taxation, a written statement, specifying the
real estate owned in each town and its cost, the capital stock paid or
secured to be paid, and the proportion of any held by the State or
any incorporated literary or charitable institution, and the town or
ward where their principal business is transacted.

See section 401.

§393. Foreign Railroads. — The personal property
within this State owned by the companies formed for the purpose
of acquiring, constructing and operating railroads in foreign countries
shall be subject to taxation.

Laws of 1881, chap. 469, § 13.



COEPOEATIONS — ASSESSMENT AND TAXATION OF. 303

§394. Telegraph, Telephone and Electric
Tiight Iiines are to be assessed in each town, or ward, for the
portion thereof situated therein.

The -word " lines " shall include the interest in the land on which
the poles stand, the right or license to erect such poles on land, all
poles, arms, insulators, wires and apparatus, instruments or other
things connected with, or used as a part of such line, in such town
or ward and belonging either to the owner of such line or the per-
son, corporation or association in control thereof.

Lairs of 1886, chap. 659,

So that the real estate is now assessed and taxed in the town, or ward, where
situated.

The telegraph and telephone companies also pay a State tax on their franchise.

See post, State "Tax on Franchise."

Every company incorporated under the " Act to provide for tlie
incorporation and regulation of telegraph companies," owning or
using a line of electric telegraph, partly within and partly beyond
the limits of this State, shall render to the proper officer a true
report of the cost to such company of their works within this State;
and the stock of such company in amount equal to such cost, or the
dividends thereof, shall be subject to taxation, in the same manner
and at the same rate as the stocks or dividends of other companies
incorporated by the laws of this State are subject.

Laws of 1853, chap. ill.

These statutes make such companies liable on personal property for the State
tax, to the State officer.s, and they should not be included in that part of the levy
made by the board of supervisors for State taxes on personal property, but are
liable, on such property, for county and town taxes, at the place where their
principal office is located.

People T. Gold & Stock Tel. Co., 98 N. Y. 67.

The failure of such companies to make the required report does not deprive the
assessors of jurisdiction to assess the property, and they were authorized, in fixing
the amount, to proceed upon such information as they had.

People, exrtl. Mut. Un. Co., v. Com'rs, 99 N. Y. 254.

A telegraph company under the act of 1853 (chapter 471, Laws of 1853), and
owning a line partly within and partly without this State, omitted to render to the
proper officer a true report of the cost of its works within the State, for the pur-
pose of taxation, as required by said act ; the whole amount of its capital stock
was entered in the assessment lists as the valuation of its property liable to taxa-
tion ; which sum was entered by the board of commissioners of taxes and assess-
ments in the city of New Tork, in the " annual record," and notice was given
that the books were open for examination and correction as required by the act of
1859 (section 8, chapter 303, Laws of 1859). The company did not appear or make
any objection to the assessment until after the expiration of the time within which
the commissioners had a right to correct it. Held, that the failure of the com-



304 SuPEKVisoEs' Manual.

pany to make tlie report did not deprive the tax commissioners of jurisdiction to
assess its property, and they were authorized, in fixing the amount, to proceed
upon such information as they had ; and that as the assessment was regular and
the company omitted to apply for a correction, it was not entitled to relief.
People, exrd., v. Comrs. of Taxes, etc., 99 N. Y. 254.

The American Bell Telephone Company of Massachusetts licenses corporations
to do husiness in the State of New York under the "exchange system," by which
a central oflBce is established, and communication carried on through it. The
instruments are supplied by the company, and remain its property, and a royalty
is paid to it on each, though they are leased by the local corporations to their
subscribers. The other apparatus belongs to the local corporations. The latter
make the leases, and collect the rents, but each lease stipulates that the company
owns the instruments, and the company reserves the right to intervene and col-
lect its portion of the rents. Another form of contract with the local corporations
provides for connecting lines on si mil ar terms, reserving to the company the right
to use the telephones thereon, and to connect the lines with the lines of the local
corporations in order to forward through messages, and provides for a division of
the tolls, and that the leases shall express the title of the company to the instru-
ments and the company may enforce, or require the local corporation to enforce,
all its rights against the subscriber. Leases for private lines are made directly
with the company, and countersigned by the local corporations, which collect the
rents, and transmit them to the company. The company also has lines connecting
with the oflBces of the Western Union Telegraph Company, under an arrangement
with the latter, by which it receives a certain portion of the income derived from
that business. Held, that the local corporations are merely the agents of the
company, which thus does business wUhin the State as intended by Laws of 1881,
chapter 361, sections 3, 6, said act being an amendment of Laws of 1880, chapter
542, and is liable to pay the percentage, at least on its capital employed in the
State, and on the dividends realized on said capital, as prescribed by section 3 of
the act of 1881, and also the tax of five-tenths per cent on its gross earnings in the
State.

People V. American Bell Tel. Co., 50 Hun, 114.

§ 395. Plankroads and Turnpikes.— So much of
any such road and of the toll-houses, gates and other appurtenances
thereof, constructed under the provisions of " An act to provide for
the incorporation of companies to construct plankroads and of com-
panies to construct turnpike roads," as shall be within any town, city
or village, shall be liable to taxation, in such town, city or village, as
real estate.

Laws of 1847, chap. 210, 8 48 ; 2 R. S. 1337.

§ 396. Pipe-Iiine Companies.— The real estate and
personal property in this State, of such companies, shall be assessed
and taxed in the several towns, villages and cities, in the same man-
ner as the real estate and personal property of railroad corporations
are assessed and taxed, and such company may commute therefor
and pay the same in the same manner as railroad companies.

Laws of 1878, chap. 203, S 36; 2 E. S. 1649.



CoEPOitATioxs — Assessment and Taxation of. 305

§397. Toll-Bridg-es.— In the case of toll-bridges, the com-
pany owning such bridge shall be assessed in the town or ward in
which the tolls are collected ; and where the tolls of any bridge, turn-
pike, or canal company are collected in the several towns or wards, the
company shall be assessed in the town or ward in which the treas-
urer or other officer authorized to pay the last preceding dividend
resides.

2 R. S. 990.

The real estate of such company is assessed in the town or ward in which it lies.

Hudson E. R. Bridge Co. v. Patterson, 74 N. Y. 865.
Its personal, where tolls are collected.

Id.

Bl*id,ge CompaillieSt — So much of any such brido;e or
toll-houses constructefl by virtue of this act, as shall be within any
town, city or village, shall be liable to taxation in such town, city or
village, as real estate.
§ 14, chap. 359, Laws of 1848.

This is the general act for incorporating bridge companies.

Natural Gas Companies. — In this proceeding, insti-
tuted to review an assessment made by the assessors of the village
of Oleau upon the property of the relator, a foreign corporation
doing business in the said village, it was shown that its property,
within this State, consisted of mains, pipes and tanks for the reception
and distribution of natural gas, laid or located beneath or upon the
streets of the village under a grant from it, and that its business was
the sale and distribution to consumers of natural gas for fuel and
light, the company itself producing no gas of its own, but receiving,
under a coiitract with another company, its supply of gas from the
pipe line of the latter company into its own mains at the village
limits.

Prom the return made by the assessors it appeared that the
method adopted by the assessors, in arriving at the valuation in
question, involved some estimate of the value of the relator's fran-
chise from the village; of its contract with the company furnishing
the gas, and of its income and the profits of its business resulting
from that contract ; if not as parts of its property at least as elements
of the value of that property.

neld, that the assessment was erroneous.

That the system of mains, tanks and service pipes, as well as a
small lot on which the tanks stood, were required, by chapter 293
39



306 SopEETisoKs' Makual.

of 1881, to be assessed as real estate, " at its full and true value,"
and that the value of the rights and privileges granted by the village
to the company, and of the contract with the other company, couJd
not be considered in determining that value.

The referee appointed in these proceedings, before whom the
hearing was had, acting pursuant to the provisions contained in
chapter 37 of 1855, based his valuation upon the cost of furnishing
and laying the gas mains and pipes, considered as an investment.

Held, that it was error to apply the rule prescribed by that act to
the valuation of real estate, as it applied only to personal property.

People, exrel., v. Martin, 48 Hun, 193.

§ 398. Apportionment for School Districts by
Assessors. — Of railroad, telegraph, telephone and pipe-line

companies by assessors. •

See ante " Commoa Schools," § 98.

§ 399. Corporations.— Wbere Personal Prop-
erty of Corporations Assessed.

The place named in the certificate of incorporation of a manafacturing corpora-
tion, organized under the general act, as the place where the operations of the
company are to be carried on, and where the manufactory is situated, determines
the location of the corporation in respect to its liability to taxation. It makes no
difference that a treasurer's office is kept and the financial operations of the com-
pany are chiefly managed at another place.

Oswego Starch Co. t. Dilloway, 21 N. T. 449 : Western Trans. Co. v. Schen, 19 id.
408; Union Steamboat Co. r. City of Buffalo, 82 id. 351.

This applies to their personal property.

§ 400. Corporations.— Personal Property.—
Capital Stock. — The capital stock of every company ImbU to
taxation, except such part of it as shall have been excepted in the
assessment-roll, or as shall have been exempted by law, together
with its surplus profits or reserved funds exceeding ten per cent of
its capital, after deducting the assessed value of its real estate and
all shares of stock in other corporations actually owned by such com-
pany, which are taxable upon their capital stock under the laws of
this State, shall be assessed at its actual value, and taxed in the same
manner as the other personal and real estate of the county.

Laws of 1857, chap. 456; 2 R. S. 1036; People, exrd. Twenty -third Street R. Co.,
V. Com'rs of Taxes, 95 N. Y. 554; People, em rel. Butchers, v. Asten, 22 N. Y.
Week. Dig. 458. And see decisions under § 390.

§ 401. Officers to Deliver Statements to As-
sessors. — The president, cashier, secretary, treasurer or other
proper officer of every such, incorporated company shall on or before



COEPOBATIONS — ASSESSMENT AND TAXATION OF. 307

the first day of July in each year make and deliver to the assessors
or one of them of the town or ward in which such company is liable
to be taxed, according to the provision of the sixth section of the
second title of this chapter, a written statement, specifying,

1. The real estate, if any, owned by such company, the towns or
wards in which the same is situated, and the sums actually paid
therefor.

2. The capital stock actually paid in and secured to be paid in ex-
cepting therefrom the sums paid for real estate and the amount of
such capital stock held by the State, and by any incorporated literary
or charitable institution. And,

3. The town or ward in which the principal office or place of
transacting the financial business of such company is situated ; or if
there be no such principal office, the town or ward in which its
operations are carried on, or in which it is liable to be taxed under
the provisions of this chapter.

» R. S. 1036. s p.

The third section required a report to be delivered to the comptroller, and ia
omitted.

The fourth and fifth prescribed a penalty for omissions to furnish such state-
ments and for prosecuting therefor.

The sixth section directed how the assessors should enter such companies on
their assessment-roll, and is omitted for the reason that the Court of Appeals de-
cides that the amendment made by chapter 456, Laws of 1857, " changed the
details of such assessments and that the rolls should be made substantially as
follows:

"In the first column insert the name of the corporation;

" III the second, the quantity of real estate owned by it, situate in the town or
ward;

" In the third, the assessed value of its real estate;

" In the fourth, the value of capital stock after making the exemption and de-
ductions required by the act of 1857."

People, ex rel. Twenty-third Street P.. Co., t. Com'rs, 95 N. T. B54.

The act of 1857 is quoted above, § 400.

It seems also, that to arrive at the assessed value of the real estate not situate
in the town or ward, if within the State, it may be ascertained from the proper
assessment-rolls; if in another State or country, or if for any other reason its as-
sessed value cannot be ascertained, the price paid, in the absence of proof or of
any other standard, may be taken as the assessable value.

Id.

The capital stock is to be assessed at its actual value, from which is to be de-
ducted the assessed value of its real estate and the other items specified in the
above act.

People, ex rel. Butchers & H. Assoc., v. Asten, 22 N. T. Week. Dig. 458 (100 N. T.
697); People, exrel. Twenty -third Street R. R. Co., v. Com'rs of Taxes, 95 N. Y. 554.

While the fact that the corporation has but little personal property; that its
business of late has produced no dividends and sworn statements that the stock
has no value, are subjects for consideration, they are not conclusive upon the
question of value.



308 SupEKVisoBs' Manual.

While the indebtedness of a corporation is a proper subject for consideratioa
in estimating the value of its capital stock, there is no authority for deducting it
from such value after such estimate has been made.

People, «z rtl. Butchers & H. Assoc, v. Asten, 22 S, T, Week. Dig. 458.

Under the act of 1857 (Chap. 456, Laws of 1857), in reference to the assessment
of taxes on corporations, the capital stock of a corporation, less the part thereof
owned by the State or by literary or charitable institutions, or exempted from
taxation by the Revised Statutes (1 R. S. 388, § 4), is to be assessed at its actual
value, whether more or less than its nominal amount, deducting, however, there-
from the assessed value of its real estate and shares owned by it in other taxable
corporations, and, also, from its surplus or reserved fund, if any, an amount not
exceeding ten per cent of its capital stock.

Where a corporation, liable to taxation under said act, has real estate in another
State or country, the provisions directing a deduction of the assessed value pf such
real estate requires that the deduction shall be measured by its actual value, and,
in the absence of other and better evidence, the price paid for the real estate may
be taken as representing such value.

The franchise of a corporation is not, within the tax laws, to be reckoned as
realty. (1 R. S. 387, §§ 1, 3.)

It seems, that corporate franchises are not, on general principles, to be con-
sidered as real property.

People, ex rel., v. Com'rs of Taxes, 104 N. Y. 240.

1. Taxes; corporate statement to assessors. Under 1 R. S. 414, § 22 (R. S. [7th
ed.] 1036), which requires oflBcers of all moneyed or stock corporations, deriving
income or profit from their capital, or otherwise, to make and deliver annually
to the tax assessors, or one of them, of the town or ward in which such company
is liable to be taxed, a written statement of taxable property, the assessors to
whom the statement is to be furnished, respecting real estate of a railroad com-
pany, are those of every town in which real estate of the company is situated.

The rule to this effect in People, ex rel. Dunkirk, etc. R. R. Co., v. Cassity, 46
N. Y. 46, 56, reaffirmed as an authoritative decision, and not a mere dictum.

2. The same; omission to furnish corporate statement. The omission of a cor-
poration to furnish such a, statement neither prevents assessors of a town from
assessing corporation real estate within its limits, nor the corporation from appear-
ing before them and asking that an erroneous assessment be corrected, and if this
be refused, from reviewing the proceedings by certiorari.

People, exrel. Sodus Bay, etc., R. R. Co., v. Cheetham, 20 Abb. N. C. 44.

For the purpose of taxing the personal property of the relator, the appellants,
the commissioners of taxes and assessments of the city of New York, assessed the
value of its capital stock and surplus at $1,459,447, and the deduction for ex-
emptions, to which it was by law entitled, at $1,734,851, which exceeded the
value of its capital and surplus. The commissioners also assessed upon separate
assessment-rolls relating to national bank stock, national bank stocks owned by
such company (such national bank stock having been included in the valuation of
the capital stock and surplus of the relator, and being stated, in the list of exemp-



Online LibraryGeorge Crane MorehouseThe supervisors' manual : a practical treatise on the law applicable to the duties of supervisors from the date of their election to the end of their official term; also, the law relative to town bonds, railroad aid bonds, defective roads and bridges, town meetings, assessment and collection of taxe → online text (page 33 of 96)