People ex rel. New York Cent. & H.R.R. Co. v. Priest

• Citation: 206 N.Y. 274,99 N.E. 547
• Parties: PEOPLE ex rel. NEW YORK CENT. & H. R. R. CO. v. PRIEST et al. (CITY OF NEW YORK, Intervener).
• Decision Date: 15 October 1912
• Court: New York Court of Appeals

206 N.Y. 274

99 N.E. 547

PEOPLE ex rel. NEW YORK CENT. & H. R. R. CO.

v.PRIEST et al. (CITY OF NEW YORK, Intervener).

Court of Appeals of New York.

Oct. 15, 1912.

Appeal from Supreme Court, Appellate Division, Third Department.

Certiorari by the People, on the relation of the New York Central & Hudson River Railroad Company, against George E. Priest and others, constituting the State Board of Tax Commissioners, and the City of New York, intervener, to review an assessment made by the board of the special franchise of the New York & Harlem Railroad Company in the borough of Manhattan for the year 1900. From an order of the Appellate Division (150 App. Div. 19,133 N. Y. Supp. 1087), unanimously affirming an order confirming the report of a referee, relator and the City appeal. Affirmed.Alex. S. Lyman, of New York City, for relator.

Archibald R. Watson, Corp. Counsel, of New York City (Curtis A . Peters, of New York City, of counsel), for intervener City of New York.

CHASE, J.

The relator is a domestic corporation, and a lessee from the New York & Harlem Railroad Company, a domestic railroad corporation, of a line of railroad extending from 42d street in the city and state of New York to and beyond the Harlem river. By the terms of said lease the relator contracted to pay all taxes and assessments made, levied, or imposed upon any of the property or franchises of said Harlem Company. In March, 1900, the state board of tax commissioners made an assessment upon an alleged special franchise constructed, maintained, or operated by said Harlem Company, and fixed the total valuation thereof in the borough of Manhattan, city of New York, at the sum of $12,192,000. On April 28, 1900, said tax commissioners, after a hearing as provided by statute, gave notice that they had filed with the department of taxes in the city of New York a statement of the valuation of said special franchise in said borough of Manhattan at the sum of $10,192,000.

This proceeding was commenced by petition, which alleged among other things: (1) That the assessment is illegal, because said board had no jurisdiction or authority to make it. (2) That the assessment is illegal, because that part of the railroad of said Harlem Company assessed is not ‘constructed and operated under or by virtue of any franchise, right or permission to construct, maintain, or operate, the same in, under, above, on, or through, any street, highway, or public place.’ (3) That the assessment is illegal, because the said board is not authorized to assess the franchise of a steam surface railroad company. (4) That the assessment is erroneous by reason of overvaluation, and that the extent of such overvaluation is $8,364,000. (5) That the assessment is unequal, in that it is made at a higher proportionate valuation than other property in said borough of Manhattan. (6) That the assessment is unequal, in that it is made at a higher proportionate assessment than other special franchises in said borough.

The city of New York was allowed to intervene as a defendant. The issues joined by the parties were referred to a referee to take testimony and report with his opinion thereon, and he, after extended hearings, reported with detailed findings of fact and conclusions of law that the assessment was made within the jurisdiction of the tax board, and that the same was not illegal . He found that the assessment of real property in the county of New York other than special franchises for the year 1900 was 67 per cent. of the full value thereof, and that the assessment of the special franchise of said Harlem Company should be reduced to the sum of $6,828,640 to correspond with the percentage that the other assessments in said county bore to the true value of the property assessed. At the Special Term of the Supreme Court, when the report of the referee came up for confirmation, the court confirmed the report of the referee and adopted the findings and conclusions made by him, and also the rulings made by him upon the proposed findings of fact and conclusions of law submitted to him by the parties to the proceedings. The assessment was reduced to said sum of $6,828,640. An appeal was taken by the relator and by the city of New York to the Appellate Division, where the order of the Special Term was unanimously affirmed. People ex rel. N. Y. C. & H. R. R. R. Co. v. Priest, 150 App. Div. 19,133 N. Y. Supp. 1087. The relator and the city each appeal to this court.

The assessment of the special franchise is upon the railroad leased by the relator of said Harlem Company, including the same as it is upon, under, and over a strip of land known as Park avenue (formerly Fourth avenue) in the borough of Manhattan, city of New York, from the southerly line of 45th street to a point near 133d street, at which point the railroad turns easterly from Park avenue and crosses property alleged to be owned by the railroad company and therefrom crosses the Harlem river by a bridge. The distance from the south side of 45th street to the said point near 133d street is 4.44 miles, and throughout all of said distance the railroad company maintains four railroad tracks.

[1] This court held in People ex rel. N. Y. C. & H. R. R. R. Co. v. Woodbury, 203 N. Y. 167, 96 N. E. 431, that the statutes authorizing the taxation of special franchises apply to steam surface railroads.

[2] The unanimous affirmance by the Appellate Division of the Special Term order also removes from our consideration all questions of fact. The Harlem Company was incorporated in 1831, and in and prior to 1837 constructed its railroad to the Harlem river in the center of what was known as Fourth Avenue. The avenue was not then in actual use as a public street above 38th street. The rights of the Harlem Company acquired at that time, so far as they are now under consideration, were confined to a strip of land 24 feet wide in the center of said avenue as then mapped and as subsequently laid out and opened. Fourth avenue, so far as now considered, was formally opened by a proceeding commenced in 1850, and there is no question about its being a public street subsequent to that time. It was so laid out 140 feet wide. It is now known as Park avenue, although it is referred to indiscriminately either as Fourth or Park avenue.

It is not disputed that the two central tracks of the railroad as now used are on such 24-foot strip, and that the two exterior tracks are outside of such strip and were first laid pursuant to authority granted by chapter 702 of the Laws of 1872. That act expressly authorized the Harlem Company ‘for the purpose of facilitating rapid transit and accommodating local traffic, to lay down permanently two additional tracks on said avenue, and to make such landings and excavations in said avenue as may be required for such additional tracks, with landings for the entrance and delivery of passengers. * * *’ Such grant is clearly a special franchise. The special franchise as assessed purports to include a right or permission to construct, maintain, and operate the four tracks in Park avenue as stated. The most important question for our consideration is whether the two central tracks of the railroad as now used are so used by virtue of a special franchise.

This court in People ex rel. N. Y. C. & H. R. R. R. Co. v. Woodbury, supra, at page 179, of 203 N. Y., at page 434 of 96 N. E., considering the object of the Special Franchise Tax Act (Consol. Laws 1909, c. 60, § 2, subd. 3), say: ‘The object of the Special Franchise Tax Act is to tax railroad corporations for privileges granted them in the streets which they occupy on their lines of railway, and if, after they have their rights of way secured over private land, a public highway is laid across the tracks, while there is a crossing, it is not a crossing made by the railroad or through public favor so far as the railroad is concerned. The relator, or one of its predecessors, was given the right to be a corporation to acquire land, and to build its road between certain terminal points. It bought its right of way and built its road accordingly. It needed no special franchise in order to use and enjoy its right of way to the utmost extent possible for railroad purposes. Years afterward a street was run across its tracks and a crossing thus created. Such a crossing, made under such circumstances, is not a special franchise within the meaning of the statute, because the railroad was built on its own right of way before the street came into existence and no additional right was granted to the railroad company by the extension of a highway across its tracks.’ Although the lands on which the tracks of the Harlem Company were laid in and prior to 1837 were not then in actual use for street purposes, the Harlem Company took possession of said lands under peculiar circumstances; and it is necessary to consider the findings of fact which show the intention and purpose of the city in regard to Fourth avenue in making the maps and in the acts, resolutions, proceedings and agreements, hereinafter mentioned, affecting the city and the Harlem Company and the occupancy of said avenue, and particularly the intention and purpose of the city in giving, and the company in accepting, the consent and permission to take possession of said avenue and construct its road thereon as also hereinafter stated.

By virtue of the Dongan charter the city of New York in 1686 became the owner of lands known as the ‘common lands' which included the land on which Park a avenue is situated from the south line of 45th street to approximately the center of 84th street. The grant was confirmed by the Montgomerie charter in 1730. In 1794 the common council ordered the street committee of said council to have the unsold common lands surveyed. The survey and map were made by Casimir Ph. Goerck. They were dated March 1, 1796, and duly filed. The committee reported to the council that they had the survey made, ...