People ex rel. New York Central & Hudson River Railroad v. Woodbury

These cases, argued together, are proceedings under writs of certiorari to review the action of the defendants, the State Board of Tax Commissioners, in assessing the several relators for special franchises. The cases were referred to a referee to take evidence and report the same, together with his findings of fact and conclusions of law. TJpon'the coming in of his reports, motions were made and heard before the late Hr. Justice Fitts for their confirmation, but the motions remained undecided at the time of his death. They were then transferred to me by stipulations for -reargument and determination. It was conceded on the argument that, under the provisions of the Tax Law, the proceeding before the court in each case was a trial, and that its own determination of the issues involved must be made.

I have given the cases the careful consideration which their importance demands. But the great delay in getting the briefs of counsel to me and the requests to find leaves me no time from my court assignments to formulate my views at any great length without postponing a decision for some time.

I must content myself, therefore, with stating my conclusions, as briefly as I may, with respect to the more important general questions involved and leave my views concerning .the less important matters to be expressed by my formal decisions and by my rulings upon the upwards of a thousand requests to find which have been presented.

The learned referee, in a very extended opinion, discussed the question of the jurisdiction of the 'State Tax Commissioners to make the assessments complained of, and reached the conclusion that they had no such jurisdiction, and reported that the assessments should be annulled. This question is fundamental and is, therefore, the most important one presented for determination. The referee’s conclusion is based upon the assertion and argument that the term, “All surface, underground or elevated railroads,” inserted in the . statute by the amendment of 1881 (chap. 293) and since retained by various amendments and revisions, was not -intended by the Legislature to include long distance terminal railroads operated by steam power, and that the words “ surface rail

There is no ambiguity in the statute and, therefore, no need for construing its meaning. Ordinarily the Legislature may be assumed to mean what it says when plain and unambiguous words are employed.

In Mayor of N. Y. v. Manhattan R. Co., 143 N. Y. 1 , 20, Judge Peckham in writing the opinion of the court, said: “ It is a waste of time to cite the general canons of construction which obtain in the discharge of the judicial duty to construe an act of the legislature. They are familiar to us all and they result in the question, what is the real meaning of the enacting body? That meaning is to be first sought in the language used, and if that-be plain, unambiguous and imperative, there is nothing left for the courts other than to obey the directions of the statute as manifested by its language.”

In McCluskey v. Cromwell, 11 N. Y. 593 , 601, Judge Allen says: “ But in the construction, both of statutes and contracts, the intent of the framers and parties is to be sought first of all, in the words and language employed, and if the words are free from ambiguity and doubt, and express plainly, clearly and distinctly, the sense of the framers of the instrument, there, is no occasion to resort to other means of interpretation. It is not allowable to interpret what has no need of interpretation, and when the words have a definite and precise meaning, to go elsewhere in search of conjecture in order to restrict or extend the meaning. Statutes and contracts should be read and understood according to the natural and most obvious import of the language, without resorting to subtle and forced construction for the purpose of either limiting or extending their operation.”

In Newell v. People, 7 N. Y. 1 , 97, it is said: “ Whether we are considering an agreement between parties, a statute or a constitution, with a view to its interpretation, the thing we are to seek is, the thought which it expresses. To ascertain this, the first resort in all cases is to the natural significa'tion of the words employed, in the order and grammatical

When the Legislature, in defining the terms “ land,” “ real estate ” and “ real property,” enacted that these terms should be construed to include, among other things, “ all surface, underground or elevated railroads,” as it did in the amendment of 1881, language was employed having no doubtful signification and which is broad enough to include all railroads of every description. If the Legislature intended the term “ all surface railroads ” to include only “ street ” surface railroads, it would have been appropriate for it, as expressive of such intent, to have inserted that word in the statute and thus to- limit the meaning of the term; but it is not the function of the court to amend the statute -by construction, to include the word, even though the court should disagree with the Legislature as to the propriety of omitting it from the statute or as to the policy of taxing steam surface railroads upon their special franchises in and across streets.

The construction sought by the' relators also necessarily involves the determination, if it is adopted, that the term “ all * * * railroads ” was intended by the. Legislature to mean only a pari of them. This is so manifestly o.ut of harmony with all canons of construction as not to be seriously thought of for a moment.

It is a well-known fact that there- are a number of lengthwise occupations of streets by steam railroads in various parts of the State, some of them several miles in length, and several miles of such occupations are by some of these relators in the city of Buffalo. Some of these occupations existed when the Special Franchise Tax Law was passed and when.it was -made to apply to “All * "" * railroads.”

Under section 3 of the Tax Law all real property within this state * * * is taxable unless exempt from taxation by-law.” A franchise granted by the State to a steam surface railroad corporation to construct, maintain and operate its road, “ in, under, above, upon or through any streets, highways or public places ” is identical in kind with the franchise of a street surface railroad to do the same thing. Both are property rights and special franchises of equal value under the same circumstances. The conclusion of the learned referee, if sound, results in entirely exempting the special franchises of steam surface railroad companies' from taxation. In reaching this conclusion it would appear that the rule of strict construction of statutes assuming to exempt property from taxation has been overlooked. Buffalo City Cemetery v. City of Buffalo, 46 N. Y. 506 ; People ex rel. Forty-third St. R. Co. v. Comrs. of Taxes, 95 id. 554 ; People ex rel New York El. R. R. Co. v. Comrs. of Taxes, 82 id. 464.

I think for these reasons that the defendants, the State Tax' Commissioners, clearly had jurisdiction, under the law, to make the assessments in question.

It is urged that the act of 1907 (chap. 720) which exempts crossings outside of a city or incorporated village and authorizes assessments upon crossings in cities and villages is unconstitutional under the Federal 'Constitution as a denial of the equal protection of the law. But there is no such denial. All corporations similarly situated are treated alike.. There is no discrimination under the law in favor of one or against another. Every railroad company is assessed in the same way upon the same class of property and the burden falls upon each alike. That is all that is essential to render the act free from successful attack under the constitutional prohibition referred to. Wurts v. Hoagland, 114 U. S. 606 ; Walston v. Nevin, 128 id. 578, 582; Magoun v. Ill. Inst. & Savings Bank, 370 id. 283, 293.

The State Board of Tax Commissioners, however, have no power to assess anything but special franchises, that is, the “ new character of property ” just mentioned. They have no power under the law to assess any “ land,” “ real estate ” or “ real property,” as those terms were used before the law was amended to provide that they should be construed to include “ all surface, underground or elevated railroads, including the value of all franchises, rights or permission to construct, maintain or operate the same, in, under, above, on»or through, streets, highways, or public places; all railroad structures, substructures and superstructures, tracks and the iron

I am convinced, therefore, that no constitutional right of the relators has been infringed by giving this power to assess special franchises to the State board. Even if I had doubts concerning the validity of the law, it would be improper for me to declare its invalidity, under the well-settled rule that the Special Term should not declare a law unconstitutional unless it clearly appears to be so.

The claim is also made that none of -the occupancies of streets, highways and public places by the relators has any taxable value whatever in excess of the tangible property therein. This is based upon the idea that no revenues can be directly traceable to such occupancies and that the burdens resting upon them because thereof .are so great as to destroy the value of the intangible rights. These burdens come from-the expense of maintaining gates and flagmen at crossings, from damage claims growing out of accidents at crossings and from other causes. The learned referee has found that the crossings had no net value at the date of the assessment in excess of the value of the tangible property. But the question to be determined is not as to the net value of the crossing, but as to the value of the special franchise, including the tangible property in the street. Many other species of property owned by railroad companies have no net value to them, if the value is to be measured by the cost thereof, the revenues directly traceable therefrom, or by the burdens caused. thereby; nevertheless the 'property is assessable for taxation at the value thereof. This is so with reference to bridges, depots, freight houses and ofttimes of branch lines

It appears that various contracts known as “ Grade Crossing Contracts ” were made between commissioners on behalf of the city of Buffalo and some of the relators, pursuant to various acts of the Legislature which need not be enumerated. The essential purpose of the contracts was to eliminate crossings at grade. In some instances the railroad was carried over the street by a viaduct; in some the crossing was effected by a subway passing under the street, and in others the contracts provided that the streets should be closed, abandoned, discontinued and obstructed and the travel thereof and thereon diverted to other routes. The claim is made that the effect of these contracts and the changes made under them is to terminate any special franchise which theretofore existed for crossing the "streets covered by the contracts at grade; and that no right, authority or permission, within the definition of a special franchise, to cross the streets in any other way, can be spelled out of the contracts; and, therefore, that no assessment for a special franchise as to any of these streets can lawfully be made. The agreements contained provisions that the parts of streets on their present grade which are hereafter to be carried over the railroad by viaduct structure or under the railroad by subway are to be abandoned and discontinued by the city of Buffalo upon the completion of such viaducts or subways and shall not thereafter be used for street purposes on the present surface thereof. Under these provisions there was but the substitution of one method" of crossing for another, and the substitution was made to eliminate the crossing at grade, but the old franchise or right to cross the street still remained. The old surface or grade of the streets and the right to use the streets at that grade and surface were abandoned and discontinued.

The assessment under the law was to be made upon the value of all • franchises, rights or permission to construct, maintain or operate, surface, underground or elevated rail

It seems that, ■ in the notice of tentative assessments given by the State hoard to some of the relators, crossings and occupations by subways and by viaducts were both included, but on grievance day the assessments on viaducts were omitted. The reason for this omission is not apparent, for both are governed by the same principles. This omission cannot now be corrected, but it in no way affects the validity of the assessments upon the crossings or occupancy'by subways.

It would seem at first sight that, where the contracts provide that certain named streets or parts thereof should be closed, abandoned, discontinued and obstructed and the travel thereof and thereon diverted to other routes, the city has put itself in such relation to the streets that they can no longer be regarded as streets, highways or public places within the meaning of the law for the purpose of assessing the relators for special franchises thereon; but, so far as these streets have been assessed 'by the State board, I am inclined to think that such assessments must be sustained. It is true that under the contracts the public have'been excluded from parts of these streets; but there is no change in the title of them,, and the municipality still has the right to maintain the sewers and pipes already laid in them and to exercise any rights .therein not inconsistent with the enlarged privileges conferred upon the respective relators under the contracts. Their franchises in these streets, or' public places, instead of being wiped out by the contracts, have been made of much greater value by reason of the exclusion of the traveling public therefrom.

I cannot yield my assent to the contention that, as to streets which have been opened up and extended across the

It has been held with respect to a corporation engaged in supplying gas for public and private use to which the right to use streets has been once granted in general terms that such grant necessarily contemplates that new streets may be opened and old ones extended and that the privilege may be exercised in the new streets as well as the old. People ex rel. Woodhaven Gas Co. v. Doehan, 153 N. Y. 533 .

Under the principle enunciated in the case last cited, the provision of subdivision 4 of section 4 of the Eailroad Law (Laws of 1890, chap. 565), granting to railroad corporations the right to construct their roads across, along or upon highways, may fairly 'be construed as a grant to cross streets thereafter opened; and such a grant is a franchise which is in the purview of the act in question.

With respect to the question of the value of the special franchises, it must be borne in mind that the burden rests upon the relators to show that the assessments made upon them are erroneous or unlawful. People ex rel. Jamaica Water Supply Co. v. State Board of Tax Commrs., 196 N. Y. 53 . The presumption is that _ the assessments are legal and proper. If it was shown that a wrong rule, theory or method had been, followed in ‘making the assessments, or that they were erroneous or unequal, they could not stand; but none of these

I think there should be a reduction in all the assessments in Buffalo of twenty-four per centum of the amount thereof, lo equalize them with the assessments of the other real property on the local rolls. It appears by- the equalization tables made by the State Board of Equalization that other real estate in the tax district, that is, in the city of Buffalo, is assessed at only seventy-six per centum of its full value. The defendants urge that the local assessors are required by law to assess all real estate. at its full value and that they have appended to their rolls their affidavits, as required by law, that they have done so in this instance. But it is well known that, in many localities, if not in most, these affidavits are mad¿- by the assessors as a matter of form, because required by law, rather than as a matter of conscience; and, when the State Board of Equalization, after investigation, has in the discharge of its duty made its tables showing that real estate in Buffalo has, notwithstanding the formal oaths of the assessors to the contrary, been assessed at only seventy-six per centum of its value, such tables should not be ignored in a matter of this kind, and the deduction stated should be made for the purpose of equalization. This method of equalization was sanctioned in the Jamaica Water Company case, supra, and should be followed here.

The motion to confirm the report of the referee is denied, the several assessments made by the State Board of Tax Commissioners in 'each of these cases and inserted in the assessment-rolls in Buffalo should be reduced by deducting therefrom twenty-four per centuni of the amount thereof and as so reduced should be confirmed, with costs to the defendants in each case against the relator.

Ordered accordingly.