
    The People ex rel. The Delaware, Lackawanna & Western Railroad Co., App’lt, v. Alexander Reed et al., Assessors, Resp’ts.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed June 23, 1892.)
    
    1. Taxes—-Railroads—Leased road.
    A domestic railroad corporation leased its road for the term of its corporate existence to defendant, a foreign corporation, by a lease which provided that the lessee should pay the taxes and assessments on the leased property. Held, that said property was properly assessed to defendant, and not to the lessor or as non-resident lands.
    
      %. Same—Basis op assessment.
    ■ The referee to whom the question of value was submitted took as the basis the rentals received by the lessor, which he divided by the length óf the leased road, capitalized the amount so obtained and made proper deductions for the cost of equipment, improvements, etc. Held, that the method of arriving at the value of the property was correct.
    Appeal from a final order and judgment entered upon the decision of the supreme court at special term, in the county of Livingston, September 12, 1891, dismissing upon the merits a writ of certiorari, issued upon the motion of the relator to review an assessment of the real property occupied by the relator in the town of York, Livingston county, New York.
    The appeal also brings up for review several intermediate orders.
    
      Charles J. Bissell, for app’lt; J. B. Adams, for resp’ts.
   Lewis, J.

This is a proceeding by the relator to review, an assessment of so much of the railroad known as the Delaware, Lackawanna & Western Railroad Company as is situated in the town of York, county of Livingstom

The assessment sought to be reviewed was for the year 1890; the assessed valuation being $174,960.

It was duly referred to a referee to take evidence and report to the court with his opinion, first, as to the actual value of the real property assessed to the relator in the town of York, and, second, as to whether the relator’s property was assessed at a higher proportionate valuation than the other real and personal property in the town of York, and. if so, whether the relator has sustained injury by reason of such unequal assessment.

Upon the report of the referee the issues were brought to trial at a special term of the supreme court in the city of Rochester, and the court having thereafter duly made and filed its written decision-thereon, dated June 29, 1891, wherein it was found as facts that the actual value of the real property which was occupied by the • relator in the town of York in 'the months of June and July, 1890, was the sum of $624,482, and that such property was not assessed at a higher proportionate valuation than the other real and personal property in the town for that year, it was adjudged that the writ of certiorari be dismissed.

The relator appealed to this court and alleges as the grounds of error, first, that the assessment directly and personally to the relator was without jurisdiction and the assessment is void.

The New York, Lackawanna & Western Railway Company is a corporation organized under the laws of the state of New York. It constructed and equipped the railroad in question, which extends from the city of Binghamton to the city of Buffalo, and when constructed and equipped the entire road, including the real estate, superstructures, locomotives, rolling-stock, franchises, and in short everything pertaining.to a fully equipped and furnished railroad, was leased by said corporation to the relator, by a written lease dated October 2,1882 for the full term of the corporate existence of the lessor, and during the full term of any and all renewals of the corporate franchise that might at any time thereafter be made.

The relator agreed to operate and manage the road during the life of the lease, and pay to the lessor certain rentals therein provided for, and, in addition thereto, the relator agreed to pay and discharge during the life of -the lease all taxes and assessments levied or imposed upon the leased property. The relator took possession of the leased property, and it thereupon became a part of its great system of railroads, and at the date of the assessment complained of, the relator was in the full possession of the entire road including the portion thereof in the town of York.

The New York, Lackawanna & Western Railway was evidently organized for the purpose of constructing and equipping the road, with the expectation and intention when that was accomplished of executing the lease mentioned.

The relator contends that as the New York, Lackawanna & Western Railway is a domestic corporation organized under the laws of this state, and the owner of the road, the assessment should have been made against that company and not against the relator, a corporation organized under the laws of the state of Pennsylvania, and operating the railroad solely by virtue of a lease thereof, and contends that the relator was in no sense a resident either of the town of York, or the state of New York, and that the assessors had no jurisdiction to assess this property directly to it and thereby create and charge it with a personal liability for tile payment of the tax.

If both companies were residents of the town of York at the time the assessment was made, it was proper to assess either; if the owner did not reside in the town, and the occupant did, the assessment should have been to the occupant; if neither of them resided in the town, the property should have been assessed as non-resident lands. Stewart v. Crysler, 100 N. Y., 382. The relator contends that the New York, Lackawanna & Western Railway, being the owner of the road in question, was for the purposes of taxation a resident of each town and county through which the road passes; and we are referred to the case of the Buffalo & State Line R. R. Co. v. Supervisors of Erie County, 48 N. Y., 93, as an authority holding that doctrine.

. That rule, however, applies only in cases where the corporation is by its agents occupying and operating the road, as stated by Earl, Commissioner, in 48 N. Y., 104. “ A corporation for many purposes lives, moves and has its being in its agents and wherever they are in possession of its real estate, carrying on its corporate business, it may be supposed to exist and reside without departing from the legal precedents or violating the spirit or letter of the law.” The New York, Lackawanna & Western Railroad Company’s principal place of business was in the year 1890, and still is, the city of Binghamton, New York.

It was not at that time operating the road; had no agents in the town of York, and therefore, under the rule above referred to, was not a resident of that town.

The relator was through its servants and agents at the time the assessment was made carrying on its corporate business in that town, and was in the possession of the property assessed.

If its being a foreign corporation precludes it from being a resident of the town of York, then the property should have been assessed as non-resident lands.

While it is true the relator was incorporated under the law's of the state of Pennsylvaina, it was operating the railroad in question located in this state.

While a natural person can reside in but one place at a time, it is, as we have seen, different with a corporation.

It may for some purposes exist and be a resident in different places at the same time, as stated by Earl, J., in 48 N. Y., supra. “ While corporations in their general aspect are mere ideal existences, without body or soul, yet they will be considered inhabitants, residents, citizens when the general spirit and purpose of the law require it.”

The relator to all intents and purposes, so far as the management and control of the property and franchises of the railroad, was a resident owner and occupant of the property assessed.

It was in the same sense and for the same reasons a resident of the town of York that the New York company would have been a resident of that town had it been then operating the road.

Where the owner does not reside in the county in which the land assessed is situated, the same mode of assessment is pursued without regard to whether he be a resident of this or of some other state.

We think the relator should be held for the purposes of taxation to have been a resident of the town of York, and that the assessment was properly made.

To hold otherwise would lead to great embarrassments in the collection of taxes for the support of the government

If, under the circumstances, the property of the company in the town of York must be assessed as non-resident property, it would practically result in the authorities being unable to collect the taxes.

Giving the construction we have to the statute works no injustice to the relator, for whether the property be assessed to it or to the Hew York, Lackawanna & Western Bailway, the relator must ultimately pay any and all taxes lawfully assessed upon the property in question.

The second point made by the appellant is that the finding of the court upon the question of the value of the relator’s real property in the town of York was based upon erroneous considerations, and that the finding docs not represent the true value of the relator’s real property.

The hearing before the referee took a very wide range; the testimony taken was very voluminous.

It was derived almost entirely from witnesses called by the relator.

After being put into narrative form and evidently much condensed, it covers more than 400 printed pages.

. With a view of establishing that the assessment was unequal, the relator called witnesses to testify as to the value of a very large proportion of the farms in the town of York; the quality of their soil, the kind and condition of the improvements, were in great detail .investigated.

Many citizens were called and subjected to searching examinations as to their personal property, including their securities, their household furniture, etc., with a view of showing what proportion of personal property in the town had been assessed.

The taking of the testimony before the referee extended over a period of seventeen months

After taking this large mass of testimony, the referee adopted a very simple and obviously correct method of arriving at the value of the property in question.

The property assessed formed a part of a great railroad.

To assess the portion of it passing through the town of York, consisting of a narrow strip of land, with its ties, rails, bridges, depots, etc., ignoring the fact that it formed a part and portion of the entire system of a great railroad, would have been very absurd.

Had the assessments through the entire length of the road been made upon that theory, the assessed valuations of the property would aggregate but a nominal sum and would result in the road, which as a whole is worth many millions of dollars, practically escaping taxation.

Inquiries as to the value of the land for farming purposes afford very little, if any, assistance in the inquiry. .

There are many embarrassments and difficulties in applying the usual and familiar rules of assessing property to railroads.

Railroad property is of a somewhat anomalous character.

The courts have approved in assessing railroad property of resorting to the method of estimating its value by its earning capacity, and the situation of the road in question is exceedingly favorable for the adoption of this rule.

The road is owned by the New York, Lackawanna & Western Company.

It is .occupied by the relator, the owner receiving rents for the use of the property.

The lease secured to it a permanent rental without any probability of decrease in the rent in the future, but a strong probability of an increase.

Under such conditions the rentals would seem to furnish a satisfactory criterion for fixing values,

The referee ascertained from." the reports to the board of railroad commissioners the rentals the owner had been receiving for the period of four years next preceding the year 1890, and found that they amounted during that period, annually, to the sum of $1,470,000, and from the same source learned that for the year ending June 80, 1890, it received $1,487,333.33.

By dividing that sum by the length of the leased road he found the average rental represented by each mile, which sum he capitalized at six per cent, and after making proper deductions for the cost of equipping the road, the value of wharfage, cattle and coal yards, coal trestles and the amount of bonds and mortgages for terminal improvements, he reported that in his opinion the portion of the road in the town of York was-worth $624,482.

The special term adopted his conclusions as the, most feasible and satisfactory meanh of arriving at the value of the property. * There was much more testimony taken, bearing as we think very remotely upon the questions under investigation.

There was sufficient evidence to sustain the findings. If, as contended by the relator, the referee was not required to make special findings of fact, that he did so does not concern the relator.

The very onerous and important duties performed by the referee were for the purpose of aiding the court in deciding the questions before it.

The court was not bound to adopt the findings of fact made by the referee.

We have examined the exceptions to the admission and rejection of evidence argued in the appellant’s brief. Had a jury been the tribunal passing upon the questions, the exceptions might be worthy of some consideration. But considering the nature of the inquiry and that the evidence was taken for the information of the trial court, and not finding that any evidence was rejected which, was material to the subject under investigation, we find nothing in the exceptions calling for a rehearing of the matter.

The judgment and order appealed from should be affirmed, . with costs.

Dwight, P. J., and Macomber, J., concur. ,  