
    The People of the State of New York ex rel. The New York Central and Hudson River Railroad Company, Relator, v. William J. Morgan, as Comptroller of the State of New York, Respondent.
    
      Tax on railroad corporations upon their gross earnings within the ■ State of New YorTt— when moneys received for carrying the United States mail are not taxable ■ thereunder. „
    Under section 184 of the Tax Law (Laws of 1896, chap. 908), imposing upon certain corporations “ an annual excise tax or license fee which shall be equal to five-tenths of one percentum upon its gross earnings within the State, which shall include its gross earnings from its transportation or transmission business originating and terminating within this State, but shall not include earnings derived’ from the business of an interstate character,” a railroad company is not taxable on moneys received for carrying the United States mail, part of which originates and terminates within the State of New York and part of which originates and terminates without the'State of New York, where it appears that it is impossible to ascertain the proportion of mail which originates and terminates in the State of New York.
    Certiorabi issued out of the Supreme Court and attested the 31st day of July, 1900, directed to William J. Morgan, as Comptroller of the State of New York, commanding him to certify and return to the clerk of the county of Albany all and singular his proceedings in relation to denying the relator’s petition to readjust an assessment levied under section 184 of the Tax Law.
    The relator, upon August 1, 1899, made a report of its earnings for the year ending June 30,1899.. By that report it appeared that the gross receipts from all sources amounted to upwards of $50,000,000. After deducting certain amounts as derived from the business of an interstate character the remainder was $20,374.602.60, and on this amount the Comptroller imposed a tax of five-tenths of one per cent, amounting to $101,673.01, the amount upon which this tax was imposed including $1,554,182.48, received for carrying the United States mail, and the tax upon that amount was $8,270.91. The relator brings this writ to review the determination of the Comptroller requiring the payment of this $8,270.91, claiming that the assessment to that extent was illegal. The material part of section 184 of the Tax Law (Laws of 1896, chap. 908), upon the construction of which the question turns, is as follows: “ Every corporation and joint stock association formed for steam surface railroad, canal, steamboat, ferry, express, navigation, pipe line, transfer, baggage express, telegraph, telephone, palace car or sleeping car purposes, and all other transportation corporations not liable to taxes under sections one hundred and eighty-five or one hundred and eighty-six of this chapter, shall pay for the privilege of exercising its corporate franchises or carrying on its business in such corporate or organized-capacity in this State, an annual excise tax or license fee which shall be equal to five-tenths of one percentum upon its gross earnings within the State, which shall include its gross earnings from its transportation or transmission business originating and terminating within this State, but shall not include earnings derived from business of an interstate character.”
    
      Samuel E. Williamson and Ira A. Place, for the relator.
    
      Robert E. Steele, for the respondent.
   Smith, J.: •

The relator challenges the assessment as unauthorized by the statute as an assessment upon' interstate transportation. It is claimed that while part of the mail transportation-originates and terminates within the State of-New York, another part originates or terminates without the State of New York; that it is impossible to separate the part which is purely of a State character and the part which is purely of an interstate character, and that, therefore, no part thereof can be taxed. It is not disputed that if mail, originating and terminating within the State, can be separated from that part which is, interstate, the relator should have distinguished them, and its failure to do so forfeits- its right to claim that the assessment is in violation of the statute. The determining question, therefore* upon this branch of the case is whether these items are separable.

From the evidence of the relator it appears that there are no books kept by the relator or by the post office department from which could be ascertained the proportion of the mail carried which is carried wholly within this State, or that which is interstate in its character. It is sworn that there are no possible means of ascertaining the . proportion of mail which originates arid terminates within the State of New York. It appears further that the contracts under which this compensation is obtained are made and necessarily made in such a manner that the compensation is for both classes of transportation. In almost every pouch of mail received by relator is included mail destined for points without the State* and in nearly every pouch delivered is included mail received from without the State. These facts stand uncontradicted upon the record. In view, therefore, of the express statutory exclusion of those earnings arising from interstate transportation of mail as a basis for the levy of the tax, and of the impossibility of distinguishing between the different classes of mail transportation, the Comptroller was not authorized to use any portion thereof as a basis for the ascertainment of said tax.

The relator should, therefore, succeed upon this writ.

All concurred, except Meewin, J., not voting.

The determination of the Comptroller reversed and the account restated, and the tax reduced by the sum of $8,270.91, with $50 costs and disbursements to relator.  