SECTION F PEOPLE EX REL. MANHATTAN RAILWAY CO. V. BARKER. [Court of Appeals of New York. June, 1895. 146 New York, 304.] Cross-appeals from order of the General Term of the Supreme Court in the first judicial department, made April 11, 1895, which reversed an order of Special Term vacating and setting aside an assessment of the relator's capital stock for taxation as personal property for the year 1894, and affirmed the proceedings of the commissioners of taxes and assessments. The facts, so far as material, are stated in the opinion. HAIGHT, J. On the 8th day of January, 1894, the commissioners of taxes and assessments of the city of New York assessed the relator, the Manhattan Railway Company, for its personal property at the sum of $30,000,000. In the month of April thereafter the relator filed a statement upon one of the blank forms furnished by the department of taxes and assessments showing its condition on the second Monday of January, 1894. An examination of the treasury of the company was thereupon had by the commissioners, who then reduced the assessment and fixed it at the sum of $17,860,712. The relator thereupon procured a writ of certiorari directed to the tax commissioners, commanding them to make return of the proceedings had before them to the Special Term of the Supreme Court in order that a review might be had before that court. Upon the returns so made by the commissioners a hearing was had by the court in November, 1894, upon which an order was entered vacating the assessment. Upon an appeal to the General Term this order was reversed and the assessment as made reinstated. In 1893 some controversy arose over the amount of the assessment of the relator's personal property, which resulted in Mr. Davies, the attorney for the relator, addressing a letter to the commissioners, in which he states that Mr. Gould had authorized him to say that if the assessment did not exceed $12,500,000 they would acquiesce. The statement made in 1893 has some slight variations from that made in 1894, but is substantially the same with the exception that the amount of surplus reported in 1894 is nearly $1,000,000 in excess of that of 1893, so that if the commissioners in fixing the amount of the assessment for 1894 acted upon the statement made in 1893 as compared with that made in 1894, and the letter addressed to them by Mr. Davies, they could not well have increased the assessment in 1894 more than $1,000,000 or thereabouts, the amount of the increase of the surplus earnings of the company. This would have made in round numbers $13,500,000. It was, however, stated upon the argument by their counsel that a very different method was adopted in reaching the amount of the assessment; that in the statement furnished to the commissioners the assessed value of the real estate had been given at $7,323,200, and no mention had been made as to its actual value, and that the commissioners were, therefore, left to judge for themselves as to the actual value, and that that was arrived at in the following manner: Which deducted from gross assets, leaves amount assessable The actual value of the real estate as assessed is thus ascertained from the relator's statement by deducting from the gross assets ..... The amount of its personal property, consisting of rolling stock, cash, tools, etc... Stock in other companies $17,860,712 56,414,667 $3,748,315 $10,823,315 We cannot adopt or approve of this method of ascertaining the value of the relator's personal property or of the actual value of its real estate. The method is erroneous and incorrect for various reasons. Under the statute the capital stock of every company liable to taxation, except such part of it as shall have been excepted in the assessment roll or shall have been exempted by law, together with its surplus profits or reserve funds exceeding 10 per cent of its capital after deducting the assessed value of its real estate and of shares of stock in other corporations actually owned by such company which are taxable upon their capital stock under the laws of this state, shall be assessed at its actual value and taxed in the same manner as other personal and real estate of the country (Laws of 1857, chap. 456, sec. 3). It is the actual value of its capital stock and not the market value of its share stock that is to be assessed; in other words, it is its actual tangible personal property and not its franchises. Other statutes provide for the taxing of its real estate and franchises. (People ex rel. The Union Trust Co. v. Coleman, 126 N. Y. 433.) The real property of the relator is located in the city of New York under the eye and subject to the inspection of the commissioners. Under the Revised Statutes they are required to assess it at its just and full value as they would appraise the same in payment of a just debt due from a solvent debtor. (1 R. S. 393, 17.) And under the Consolidation Act for the city of New York it shall be assessed "at the sum for which such property under or dinary circumstances would sell." The value of property is determined by what it can be bought and sold for, and there can be no doubt but that these various expressions used in the statutes all are intended to mean the actual value of the property. The commissioners are sworn officers, and as such, in absence of evidence to the contrary, are presumed to have done their duty. They have assessed the real estate at $7,323,200, and yet, under the method presented by their counsel for ascertaining the value of the relator's personal property, they now estimate the actual value of the real estate to be $45,591,352. We are aware that it is generally understood that in many localities throughout the state assessors, in violation of their duties, assess the real estate in their localities at a sum less than its actual value, but in the absence of evidence that this has been done by the commissioners of taxes and assessments in the city of New York, we cannot assume that they have so transgressed for the purpose of approving of their work in this case. Real property cannot well be covered up or hid from view. Its value can readily be ascertained. It should be assessed upon estimates directly made as to its value and not upon presumptions figured upon intricate theories. Again, the method presented by respondents' counsel involves the presumption that the indebtedness of the corporation represents property to the amount of such indebtedness in addition to that represented by its capital stock. This presumption cannot be indulged. The indebtedness may have been incurred for operating expenses, wages of employes and material used up. It may represent property worn out, decayed or burned up during the existence of the corporation. Presumptions that arise from the earnings of a corporation and those that arise from its indebtedness are quite different. Too many of the railroads of the country are in the hands of receivers to warrant a judicial presumption that the bonded or B. VIII-28 other indebtedness of each road represents its actual tangible property in addition to that represented by its capital stock. And again, the method proposed necessarily includes the value of the franchises possessed by the corporation which, as we have seen, cannot properly be included in the assessment under review. Whilst the assessment made cannot be sustained, we think that the relator ought not to escape a proper assessment for the property. It is true that the commissioners are not free to capriciously disregard the evidence and emancipate themselves from all restrictions and rules, however fundamental; they are not bound by statements that are contradicted and which they disbelieve, where good reasons exist for such disbelief. (The People ex rel. Union Trust Co. v. Coleman, supra; The People ex rel. Edison El. Co. v. Barker, 139 N. Y. 55-67; The People ex rel. Manh. F. Ins. Co. v. The Comrs. of Taxes, 76 id. 64; The People ex rel. Gen. El. Co. v. Barker, 141 id. 251; People ex rel. Westchester F. Ins. Co. v. Davenport, 91 id. 574.) The letter of Mr. Davies in 1893 to the effect that if the assessment was made at $12,500,000 the company would acquiesce, having been written for the purpose of a settlement, and an adjustment of the controversy then existing, could not properly be adopted by the commissioners as the basis of an assessment for subsequent years. Still, at the same time, it might well create a suspicion as to the truthfulness of a statement made the year following showing that so far as the property of the corporation was concerned, aside from its franchises, it was insolvent to the extent of $3,000,000. Aside from this, there exists the fact that the net earnings of the corporation for the year were such as to enable it to pay the interest upon its indebtedness and a dividend upon its thirty millions of capital stock of 6 per cent and still have a surplus bordering upon a million dollars. These facts fully justified |