
    The People ex rel. Lehigh Valley Railroad Company, Relator, v. William Sohmer, as Comptroller of the State of New York, Respondent.
    (Supreme Court, Albany Special Term,
    March, 1914.)
    ■Certiorari — who may make application for á writ of — assignment to relator by certain corporations of all their interests in any refunds and credits then and thereafter due or accrued — when application denied — Tax Law, § igg.
    ■ It is a condition precedent to the making of an application for a writ of certiorari, under section 199 of the Tax Law to review a franchise tax, that the amount thereof be deposited with the state treasurer as required by section 200 of said statute.
    Upon an application by relator, a foreign railroad corporation, for revision of a franchise tax assessed against it during a period of seven years, the same was reduced in amount but the state comptroller refused to credit relator with the taxes it had paid for the same years assessed against two domestic railroad corporations, each operated by relator under a 999 years lease which contained a covenant that relator would pay all taxes assessed against the lessor companies in the stock of each of which relator owned a controlling interest. Prior to the hearing on the application for revision each of the other* corporations assigned to relator all its interest in any refunds and credits then and thereafter due or accrued arising out of the payments made by relator during the years in question upon the taxes assessed against such two other corporations based upon capital stock employed in this state. On the hearing of relator’s application for a writ of certiorari under section 199 of the Tax Law to review the taxes assessed against it and which the comptroller refused to credit relator with on the revision, it was conceded that the amount of said taxes had not been deposited with the state treasurer. Held, that the application for the writ must be denied though relator claimed that the taxes against the other two corporations were illegally assessed and paid.
    Motion for the issuance of a writ of certiorari.
    Kenefick, Cooke, Mitchell & Bass (Edward H. Letchworth, of counsel), for relator.
    Thomas Carmody, attorney-general (Franklin Kennedy, deputy, of counsel), for respondent.
   Chester, J.

This is an application for a writ of certiorari made upon notice to the respondent, who has filed an answering- affidavit in opposition. In the petition it is shown that the relator paid taxes during the years 1905 to 1911, inclusive, assessed by the comptroller under section 182 of the Tax Law (Laws of 1909, chap. 62) upon the capital stock of the Lehigh and New York Bailroad Company amounting to $17,540.58 and upon the capital stock of the Lehigh Valley Bail-way Company amounting to $67,110.75 aggregating $84,651.33 in all. The taxes were paid by the relator for the reason that during the years in question it was operating the railroads of each of the other two companies under a lease of each of them for 999 years, and also owned a controlling interest in the stock of each of such companies and because of a covenant in the leases that it would pay all taxes that were assessed against the lessor companies.

Each of said other companies is a domestic railroad corporation while the relator is a foreign railroad corporation, and, prior to the hearing before the comptroller on an application for a revision and readjustment of such taxes, each of said other companies assigned to the relator all its interest in any refunds and credits then or thereafter due or accrued from the comptroller -or the state arising out of the payments made by the relator to the state during the years in question, upon the taxes assessed against such two other companies, based upon capital stock employed in the state.

The comptroller has now audited and determined an account against the Lehigh Valley Railroad Company, the relator, for taxes on its franchise or business, based on its capital stock employed in the state under section 182 of the Tax Law, for each of said years, amounting in the aggregate to $76,157.23. On an application for revision or readjustment, the comptroller revised such tax for the seven years in question, by reducing it from the sum of $76,157.23 to the sum of $73,220.46 and refused to credit the relator with the taxes paid by it for the same years assessed against the Lehigh Valley Railway Company and the Lehigh and New York Railroad Company, and it is this tax so assessed against the relator that it seeks to review under the writ of certiorari asked for.

Section 200 of the Tax Law provides that no certiorari to review any audit and statement of an account or any determination of the comptroller shall be granted without thirty days’ previous notice of the application and further that ‘‘ the full amount of the taxes, percentage, interest and other charges audited and stated in such account must be deposited with the state treasurer before making the application.” It is conceded here that these taxes have not been deposited with the state treasurer. The relator insists however that it should not be compelled to make such deposit because the taxes above mentioned assessed against the Lehigh Valley Railway Company and the Lehigh and New York Railroad Company amounting in the aggregate to $84,651.33 were illegal and void and that those two corporations were not properly taxable during the years in question and that their payment by the relator was of an amount not legally due the state. It insists, therefore, that it is entitled to credit on this application to the extent of the amount so paid to offset the taxes which are sought to be brought in question pursuant to the writ asked for.

The relator urges that it must be assumed on this application that the allegation of the petition must be taken as true that the taxes assessed and paid by the two other corporations were illegal and void. That, however, is denied in the answering affidavit and it is there insisted that the facts stated show that such tax was properly assessed and paid. I think under such circumstances the court is not to assume the invalidity of the taxes, although it is so alleged in the petition, and that the question of the validity or invalidity of the taxes should not be determined until after the issuance of a writ and the filing of a return thereto, bringing before the court the entire record when the whole matter as to those taxes as well as the taxes more directly brought in question if the writ is issued may be determined.

The remedy by writ of certiorari to review a tax of this character is purely statutory and is found in section 199 of the Tax Law. Section 200, as above stated, requires as a condition precedent that the tax sought to be reviewed must be deposited with the state treasurer before making the application.

It seems to me clear that on this application the court should not hold whether the taxes assessed and paid by the two other companies were valid or void, for the reason above stated, and therefore it cannot be properly held that the relator is entitled to a credit on the taxes now sought to be reviewed, because of the payment by it of the taxes against the other two companies which it now claims were illegally assessed and paid.

While there are authorities that a corporation which pays illegal taxes to the comptroller under the provision of the Tax Law is entitled to have him credit it with the illegal amount, upon subsequent valid taxes (People ex rel. Edison Company v. Wemple, 133 N. Y. 617), yet no authority has been called to my attention which requires that to be done upon a disputed claim of the invalidity of the tax. Nor is there any provision in the Tax Law requiring or justifying it in such a case.

The only provision in the statute for a credit is in section 198 of the Tax Law which applies only to a case where there has been a revision or readjustment of the account for taxes by the comptroller and he has found the assessment to be illegal or excessive. Then a credit can be allowed, but that is not this case.

If, as relator claims, the taxes against the other two companies were unlawfully exacted, it may be a harsh rule which prevents it from now having a credit for such taxes, but as the authority for the review now asked is wholly statutory and the case presented has not been provided for in the statute it seems impossible to relieve it from the necessity of making the deposit required by law before the writ can issue.

The application must, therefore, be denied.

Application denied.  