People ex rel. New York, C.&H.R.R. Co. v. Mealy

• Decision Date: 12 July 1918
• Citation: 120 N.E. 155,224 N.Y. 187
• Court: New York Court of Appeals Court of Appeals
• Parties: PEOPLE ex rel. NEW YORK, C. & H. R. R. CO. v. MEALY et al., Assessors of City of Troy. PEOPLE ex rel. TROY UNION R. CO. v. SAME.

224 N.Y. 187

120 N.E. 155

PEOPLE ex rel. NEW YORK, C. & H. R. R. CO.

v.MEALY et al., Assessors of City of Troy.

PEOPLE ex rel. TROY UNION R. CO.

v.SAME.

Court of Appeals of New York.

July 12, 1918.

Appeal from Supreme Court, Appellate Division, Third Department.

Certiorari by the People on the relation of the New York Central & Hudson River Railroad Company, and by the People on the relation of the Troy Union Railroad Company, against G. Frank Mealy and others, as Assessors of the City of Troy. From an order of the Appellate Division (179 App. Div. 951,165 N. Y. Supp. 1106), affirming an order of the Special Term (88 Misc. Rep. 649,152 N. Y. Supp. 435), dismissing the petition and quashing the writ, the relators appeal. Orders affirmed.Lewis E. Carr, of Albany, for appellants.

George B. Wellington, of Troy, for respondents.

CHASE, J.

In 1911 the assessors of the city of Troy placed on the assessment roll of said city an assessment as follows:

‘Troy Union Railroad Co., Boston and Maine Railroad Co., Delaware and Hudson Railroad Co., New York Central and Hudson River Railroad Co.

‘The lands of roadbed and adjacent thereto in the several wards of the city, with rails, superstructures, depot buildings and appurtenances being all the railroad property in the city of Troy located between Madison St. on the south, Hoosick St. on the north and the approach of the Delaware and Hudson Company's bridge on the west, excepting that portion assessed as franchises lying in public streets.

‘(Valuation, $1,000,000.) (Real property.)

‘Special franchise, 1911, $215,400.’

The Troy Union Railroad Company and the New York Central & Hudson River Railroad Company each obtained a writ of certiorari to review the assessment. The statements hereinafter made are applicable to each proceeding. A referee was appointed to take evidence upon the issues therein and report the same to the court with his findings of fact and conclusions of law. He reported in favor of dismissing the petition and quashing the writ. The proceedings, including the evidence taken by the referee and his findings of fact and conclusions of law, then came up for determination at the Special Term, and the court affirmed the report of the referee, and also made new findings, and the petition was dismissed and the writ of certiorari quashed. People ex rel. N. Y. C. & H. R. R. R. Co. v. Mealy and People ex rel. Troy Union R. R. Co. v. Mealy, 88 Misc. Rep. 649,152 N. Y. Supp. 435. An appeal was taken to the Appellate Division of the Supreme Court. The order was there unanimously affirmed on the opinion of Chester, J., at the Special Term. People ex rel. N. Y. C. & H. R. R. R. Co. v. Mealy and People ex rel. Troy Union R. R. Co. v. Mealy, 179 App. Div. 951,165 N. Y. Supp. 1106. An appeal has been taken to this court from the order entered thereon.

In 1851 four railroad companies each had the terminus of its road in the city of Troy. Each company generally propelled its cars on tracks by steam power, but the steam power was not used within the limits of the city of Troy. Within the city limits the cars were drawn by horses on tracks in public streets leading to the central business part of the city. It does not appear that either company maintained a building in the city for the use of passengers. By chapter 255 of the Laws of 1851 it was provided:

‘The corporation of the city of Troy, and the several railroad corporations whose railroads now or hereafter shall come to the city of Troy, or which have or shall have their business terminus in, or run their trains to and from said city, may subscribe for and become the owners of stock in a railroad corporation to be organized under’ the General Railroad Act of 1850. Laws of 1850, c. 140.

It was also therein provided that:

The corporation of the city of Troy might ‘borrow upon the bonds of said city, redeemable in not more than twenty years, at an annual interest of six per cent. a sum not exceeding the cost of the construction of such railroad; but no bonds shall be issued therefor by the corporation of said city until said corporation shall, by the several railroad corporations which are authorized to subscribe for stock by the first section of this act, and also by a mortgage on the railroad so to be constructed, its capital stock and franchises, be fully indemnified and made harmless against the payment of any bonds and the interest thereon which said city of Troy may issue under the authority of this act.’

On July 31, 1851, articles of incorporation of the Troy Union Railroad Company were filed pursuant to said General Railroad Law of 1850. They provided that the capital stock of the company should be $30,000. On the 3d day of December, 1852, a contract was entered into by and between the mayor, recorder, aldermen, and commonalty of the city of Troy of the first part, Troy Union Railroad Company of the second part, and the four railroad companies mentioned of the third, fourth, fifth, and sixth parts. The state of New York was not a party to the contract. The contract recited the organization of the Troy Union Railroad Company for the purposes provided by the act of 1851-the appointment of commissioners under said act-and the location of the railroad in the city of Troy according to a survey thereof, a copy of which was made a part of the contract-and in substance that the four railroad companies mentioned had subscribed for all of the capital stock of the Troy Union Railroad Company. It also provided for a loan of money by the city of Troy to the Troy Union Railroad Company and for tolls to be paid to the Troy Union Railroad Company by the railroad companies using the tracks in the city of Troy. It was also therein provided as follows:

‘17. The party of the first part agrees that the common council of the city of Troy shall join in an application to the Legislature of the state of New York that the Troy Union Railroad Company be exempt from taxation upon an amount exceeding the present amount of its capital stock * * * and if such law shall not be passed the common council of the city of Troy shall refund to the Troy Union Railroad Company an amount equal to the city taxes imposed on the Troy Union Railroad Company for any calculation exceeding its present capital stock. * * *’

Within a few days thereafter the Troy Union Railroad Company executed and delivered to the city of Troy a mortgage on its road, property, and franchises to secure the payment of the principal and interest on the bonds issued by the city to raise money for the Troy Union Railroad Company and the four other railroad companies, parties to the agreement executed and delivered to the city of Troy an agreement by which they indemnified the city of Troy against any default of the Troy Union Railroad Company upon its mortgage. The agreement also contained many provisions not important in determining the question before us. On June 24, 1853, the Legislature passed an act (Laws of 1853, c. 462) which provided:

‘For the purposes of taxation in the city of Troy, and in the county of Rensselaer, the property of the Troy Union Railroad Company shall be estimated and assessed (as the common council of said city of Troy, by its contract with said company, dated December third, eighteen hundred and fifty-two, agreed that the same should be) at the amount of the capital stock of said company, and no more. * * *’

The parenthetical statement in the act as to the contract with the common council of the city of Troy is not in accordance with the fact. The contract on the part of the mayor, recorder, aldermen, and commonalty of the city of Troy was that the common council shall join in an application to the Legislature of the state of New York to exempt the Troy Union Railroad Company from taxation upon an amount exceeding the capital stock of the Union Company. It further contracted that in case the Legislature did not pass such an act, the common council would refund to the Troy Union Railroad Company an amount equal to the city taxes imposed on the Union Company for a valuation exceeding its then present capital stock. It thus appears that the contract of 1852 did not pretend to be and was not in fact a contract that the Union Railroad Company should be exempt from taxes for an amount on a valuation exceeding its capital stock. It also appears that the agreement in regard to refunding taxes as therein provided in no way refers to the county of Rensselaer. The act of 1853 assented to and provided for an exemption as therein stated, but it did not make the state a party to the contract, and it was in no sense a ratification of a contract for exemption theretofore made by the city of Troy. After the act of 1853, and prior to the year 1858, the Troy Union Railroad Company defaulted in paying the interest on the bonds of the city of Troy issued pursuant to said contract, and an action was commenced to foreclose the mortgage of the railroad company. On July 1, 1858, another agreement was entered into by and between the same parties as in the agreement of December 3, 1852, which recited the act of 1851, the organization of the Troy Union Railroad Company and the construction of its road in the city of Troy, the receipt of money therefor from said city, and the execution of the mortgage as security for the bonds executed by the city of Troy for the money so advanced to the railroad company, and the fact that an action had been commenced to foreclose said mortgage, and provided:

‘The parties hereto for the purpose of settling the matters involved in said suit and for the purpose of reforming the contract entered into by or on behalf of the above-named parties bearing date the third day of December, 1852, adopt this instead of and in place of said contract which is hereby annulled.’

It was therein provided that the railroad companies operating roads within the city of Troy should pay upon monthly assessments the necessary expenses and the indebtedness of...