
    The People of the State of New York ex rel. The Coney Island and Brooklyn Railroad Company, Respondent, v. B. G. Neff and Others, Constituting the Board of Assessors of the City of Brooklyn, Appellants.
    
      Taxation — assessment upon the personalty of a street railway—the value of its franchise not covered thereby.
    
    A street railroad company is assessable, for the purpose of taxation on personalty, upon its actual tangible property only, and not upon its franchise.
    Appeal by the defendants, B. G. Neff and others, constituting the board of assessors of the city of Brooklyn, from so much of an order or judgment of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 21st day of November, 1896, as orders, adjudges and decrees that the assessment of personal property of the relator at $340,442, is illegal and erroneous, by reason of overvaluation; that the relator has no personal property subject to taxation, and as orders the defendants to strike the assessment of the relator for personal property from the assessment roll of the city of Brooklyn, and vacates and sets it aside.
    
      Rollin A. Breckinridge, Assistant Corporation Counsel, for the appellants.
    
      William N. Dykman, for the respondent.
   Cullen, J.:

The appellants, constituting the board of assessors of the city of Brooklyn, assessed the personal estate of the relator in the year 1896 at a valuation of $410,442. Thereupon, during the time provided for that purpose by law, Henry W. Slocum, one of the directors of the corporation, appeared before the board with a verified statement of the property and assets of the corporation and its liabilities. He was sworn and examined as to the correctness of the statement and the details of the property owned by the corporation. From the statement and the evidence of Mr. Slocum it appeared that the total gross assets of the corporation amounted to $1,046,000, its funded debt $700,000, and the assessed valuation of its real estate $488,321. The aggregate of these last two items exceed the value of the relator’s property by $141,494. Mr. Slocum testified that the company was earning more than enough to pay six per cent dividends, and that he considered the capital stock worth more than par. The assessors took no other evidence than that of Mr. Slocum. They appear to have probed the witness to such extent as they saw fit. They sought for information from no other source than his testimony and statement. Thereupon they assessed the personalty of the relator at $340,442. On the hearing at Special Term, on return to the writ of certiorari, the counsel for the assessors stated that the testimony of Mr. Slocum was sufficient for the disposition of the matter, and that the assessors did not disregard or claim to be justified in disregarding such testimony. The Special Term held that the action of the assessors, in assessing the personalty of the relator at any sum, was against the evidence, and canceled, the assessment.

We think that the action of the Special Term was unquestionably correct, under the doctrine laid down by the decisions of the Court of Appeals, whatever might be our view of the question as an original proposition. In The People ex rel. Union Trust Company v. Coleman (126 N. Y. 433) it was held that a trust company could be assessed only for its existing tangible capital and surplus, exclusive of its dividend-earning power, its franchises or the good will of an established and prosperous business. It would seem in that case the only franchises the relator had were to be a corporation and to do business. In the case of a street railroad company, besides the franchise to be a corporation, the company has a franchise to maintain and operate a railroad on the street or highway. This last franchise is of a very different character from those of trust companies, banks and insurance companies. In People v. O'Brien (111 N. Y. 1) it was held that such a franchise was property ; that the corporation in that case had an estate in fee in Broadway upon which it was constructed which could not be abrogated or destroyed by the act of the Legislature ; that being property it would survive the existence of the corporation and at the termination of the corporate life of the corporation go with the other assets to the stockholders or creditors of the company. The distinction between such a franchise and the franchises of exercising banking, trading and insurance powers, which ordinarily expire with the death of the corporation, is clearly pointed out by Huger, Ch. J. But in People ex rel. Manhattan Railway Company v. Barker (146 N. Y. 304) the question of the right to tax the franchises of a street railroad was presented. The Court of Appeals followed the doctrine of the Union Trust Company Case (supra), and held that the value of the franchise could not be assessed as being part of the personalty of the relator. Under this rule there is no inconsistency between the statements of the witness Slocum which justify the assessors from disregarding his evidence as to “ its actual, tangible personal property and not its franchises,” which, under the decision in the Manhattan Railway Company case, was the only thing to be assessed. It is by no means improbable, nay even it is quite likely, that with only some $1,000,000 worth of property it is able to pay not only interest on a funded debt of $700,000, but fair dividends on a nominal capital stock of $1,000,000. The reason is that this property is employed in the exercise of a franchise to run a railroad through the public streets. It is this franchise, and not the value of the physical property, that makes the relator’s stock valuable. As long as such franchise is exempt from the burden of local taxation, we cannot see that any just criticism can he made upon the statement of the corporation or the evidence of its director."

One argument remains to be noticed. In estimating the value of the assets of the corporation its real estate was taken at its assessed value. It is said to be a well-known fact that real property in this city is not assessed at its full value, but only seventy per cent of such value. Assume this to be the case. If we add to the amount of gross assets returned forty-three per cent of the assessed value of the real property and credit the corporation for $46,568.31, its current debts exclusive of funded obligations, there still remains no excess for which the relator could be taxed.

The order appealed from should be affirmed, with ten dollars costs and disbursements.

All concurred.

Order affirmed, with ten dollars costs and disbursements.  