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and 114 New York State Reporter islature deemed it wise to add to the taxable list the so-called special franchise, the duty of assessing it devolved at once upon the local assessors. Its creation at once brought it within the scope of their official duties. By virtue of the functions of such office it became the duty of the assessors to assess it. It is true that the assessors have never heretofore had the opportunity of assessing such property. It has never been made taxable, and so brought within the scope of their duties; but their right and duty to assess, now that it has been made taxable, has always existed, and by appointing another officer to perform that duty the act in question directly invades the functions of such office, and attacks the principle of home rule. Moreover, a considerable portion of the “special franchise” consists of tangible property that has long been assessed by the local officers. In the city of New York alone it amounts to something over $76,000,000. All such property the law in question withdraws from the assessment by local assessors. It is argued that such property is a mere adjunct to the "franchise or right to use it," and that, as the duty of assessing such right may be taken away, the duty of assessing its adjuncts must go with it. As said above, this is a question of power in the legislature, and I am unable to understand how that body gets the power to withdraw the tangible property from local assessment by merely requiring it to be assessed with the intangible right to use it. It cannot do indirectly what it may not do directly. It has no more power to add it to intangible property, and so withdraw it from local assessment, than it has the power to withdraw it directly from such assessment.

I am forced to the conclusion that so much of the act in question as provides for the assessment of a special franchise by the state board of tax commissioners is unconstitutional and void. I am not unmindful of the importance of this question. The great interest which the taxpayers of the state take in this effort to subject to the burden of taxation a very large amount of property which undoubtedly is of immense value to its owners, and the disappointment which will naturally accrue through its failure to them, and to those legislators who evidently adopted this plan as the one best calculated to protect alike the owner and the public, are fully appreciated by me. But this court does not enter as a pioneer upon the consideration of this question. Every principle involved in it has been settled by the court of appeals, and we may do no more than recognize and enforce such principles in their application to this case. As stated above, in my judgment the decision in the Raymond Case absolutely dominates this case.

CHASE, J., concurs.

KELLOGG, J. (concurring). The question of the constitutionality of the so-called special franchise amendment of the general tax law is approached with no little hesitancy, owing to its importance; also to the fact that it has been discussed and determined by an able jurist,

—the learned referee appointed herein,—and the further fact that the question is avowedly on its way to the court of appeals, where alone the question can be finally answered. Counsel on both sides have very ably and with evident conviction argued this question before us, and insist upon the deliberate judgment of this court, unbiased by what has gone before or what may come after; and we are therefore called upon to express our independent convictions, and briefly state the grounds upon which they are based.

The learned referee has held that assessing property for the purpose of taxation under the general tax laws of the state is a local function, and can be exercised only by local assessors elected by the electors of the locality or appointed by the local authorities. He says:

"The assessment of property for the purpose of taxation has always in this state been a function of local officers elected or appointed in the locality where they discharged their duties, and this system of assessment is intrenched in the constitution to secure to the people the home rule to which they had always been accustomed, and of which the people of our race bave always been tenacious.”

This must mean that the legislature has not the power to take from the local assessors this function, and settle it upon an individual or body appointed by the legislature. It is not a function which the legislature has power to change from a local to a state function. This conclusion of the learned referee is supported by the court of appeals in People v. Raymond, 37 N. Y. 428, and by every case in that court in which the question of assessment of property for purposes of general taxation has directly or indirectly arisen. The organization tax and franchise tax levied by the comptroller upon corporations are held not to be taxes, but charges by the state upon the right to do business in a corporate capacity,-a privilege the state may give or take away. So with the inheritance tax. It is held not to be a tax upon property, but a charge upon the succession; also a right the state may give or take away. In re Swift, 137 N. Y. 77, 32 N. E. 1096. It has never been claimed that valuations made by the comptroller, or by his appointees, or by any appointee of the state, in such cases, for the purpose of fixing the sum to be charged for the enjoyment of these state privileges, was a lo tion. The state has seen fit to base its claim against certain corporations upon a valuation of capital employed in the state. It might have demanded a share of their earnings, instead; and it might, without valuation, have taken a share in kind of the property of a eleceased person, as the price of transmission of the remainder to the heir, devisee, or legatee. I do not, therefore, see how such incidental valuations for special purposes have any bearing upon the question before us.

Speaking generally of the home rule which the constitution essays to protect, the courts in many instances have undertaken to define, distinguish, and point out what is not a local function, as contemplated by the constitution; but, as to the matter of assessment of property for general taxation, they have uniformly held that to be a local function. The class of cases in which the courts have held the function to be exercised not to be exclusively local are such as relate to the exercise of police powers, and as instances of these are and 114 New York State Reporter People v. Draper, 15 N. Y. 532; People v. Pinckney, 32 N. Y. 377; Board v. Heister, 37 N. Y. 661; Board v. Barrie, 34 N. Y. 657; Astor v. Mayor, etc., 62 N. Y. 567; People v. McDonald, 69 N. Y. 362; People v. Cheritree, 6 Thomp. & C. 473; Hanlon v. Supervisors, 57 Barb. 383; City of Syracuse v. Hubbard, 64 App. Div. 587, 72 N. Y. Supp. 802; People v. Board of Sup’rs of Oneida Co., 170 N. Y. 105, 62 N. E. 1092. In these cases the court in every instance professed to see that the principle of home rule contemplated by the constitution was not involved, for the reason that the function sought to be exercised was not local in such a sense as to deprive the state from its unlimited exercise. In some cases it is true that the prevailing opinion of the court conveys the impression that local self-government, as a principle, so far as recognized by the constitution, is a sort of nebula, with limitations as uncertain, unstable, and elusive as the tail of a comet (Allison v. Welde, 172 N. Y. 421, 65 N. E. 263); but all nevertheless declare that the constitution does recognize the principle, and protects it against legislative encroachment. It will be of little worth to here state the process of court reasoning by which conclusions were in those cases arrived at. We are only concerned with the uniform finding of the court in each case that the function sought to be exercised by the state was not a local function, and the home rule principle imbedded in the constitution was in no manner or degree invaded. None of these cases excuses the conclusion arrived at on the ground that the invasion of the field protected by the constitution was slight or not substantial. None of them claims that there is a difference between a small invasion and a great one, in determining whether an act of the legislature is constitutional or otherwise. If the theory of "substantial invasion” is the proper theory in determining whether or not there has been an unlawful violation of the constitution, the courts might well have held in the Brenner Case (In re Brenner, 170 N. Y. 185, 63 N. E. 133) that the act considered was constitutional because there was left to the home rule the power of appointment and election of so many other officers that the taking away of a single office was not a substantial infringement.

It seems to me that the question of the constitutionality of the act we are considering hinges wholly upon the question as to whether or not the assessment of property for general taxation is an exclusively local function. If it is conceded to be or is determined to be an exclusively local function, and, as said by the referee, is a "system of assessment intrenched in the constitution to secure to the people the home rule to which they have always been accustomed, and of which the people of our race have always been tenacious," then it must be the duty of the courts, until the people shall change the organic law, to see that these secured rights are not unlawfully invaded. It matters not, it seems to me, how little or how great may be the invasion proposed. Every little violation of the constitution is as inexcusable as is a larger violation. Considerations of convenience or better service have no place in the discussion or in the determination of this question. If we are authorized to hew away the constitution every time it binds, and so make it run in accord with the legislative idea of public needs, we might then take into account the good and the bad which might result from the change.

The learned referee has found that the tangible property heretofore assessed by local assessors throughout the state amounts to $76,585,225. The assessment of this is by the legislative amendment to the general tax law taken from the local assessors, and the function transferred to a state board. No one can deny that this is a palpable violation of the constitution, at least in some degree. It may not be a very large invasion, but it is a material invasion, for I assume that every invasion, if plainly an encroachment, however small it may be, is material to those who give heed to a constitutional prohibition. The excuse for transferring this power to assess the tangible property on, under, and over the public streets and places is based upon the claim that this property is inseverable from the franchise,—the intangible property. That it is not so inseverable for the purpose of valuation is plain. That is manifest from the findings of the referee, who has ascertained from the testimony of the state board of assessors the value of the tangible and intangible separately. It is also plain from the approved method of assessment adopted by the state board, viz., apprising first the whole property of the corporation, and deducting therefrom the value of all tangible property, of every name and kind, owned by the corporation, estimated on the cost of reproduction, and taking the result as the net valuation of the intangible, or franchise. It is not inseverable, either, for the purposes of enforcing payment of the tax. The franchise may be sold without the tangible property on, under, or over the

Its value without the tangible would be the value of both, less the cost of reproduction of the tangible,-so the state board of assessors have determined,

and both are separately valuable. The tracks of a street railway are no more essential to a profitable use of the franchise than are the power houses which furnish the power, and which are not assessed with the intangible property. Both the tracks and the power houses, as well as the rolling stock, may be replaced. The case cited (People v. O'Brien, in N. Y. 47, 18 N. E. 692, 2 L. R. A. 255, 7 Am. St. Rep. 684) to show that "the franchises would be of no value without tangible property to operate them, and so they are inseparable,” was based upon Gue v. Canal Co., 24 How. 257, 16 L. Ed. 635. That was a case where the sale of a canal by piecemeal was sought to be enjoined in equity. A levy had been made on the locks of the canal, the tollhouse, and land surrounding the outlet locks,—all essential to the uses of the canal. The court held that to sell a canal lock would destroy all value in the canal itself, and would be of no value to the purchaser; hence the sale was enjoined. It is obvious that a canal so far differs from a street railway as to make the case cited wholly inapplicable. The tracks of a railway may be removed, but the lock of the canal could not be. There could be no replacement of the property sought to be sold, appertaining to the canal; hence a sale would destroy the franchise. This cannot be the case as to any of the property contemplated to be assessed by the amendment of the tax law under the name of “special franchise."

and 114 New York State Reporter

The assessment by a state board of the franchises themselves-the intangible property of a corporation, as defined by the amended act-presents, perhaps, another question. This property is not now property coming to the locality, but has always existed there, though it has never been locally assessed. To assess this property judiciously, or by the method adopted by the state board, the local assessors in most cases would need to go beyond their precincts. The property can hardly be said to be localized. For instance, a street surface railway, a telegraph, telephone, or pipeline, which runs through several incorporated villages and on the highways of intervening towns, must possess a franchise from each municipality. The value of these franchises, separately considered, might be very little, but the value combined might be very great. The right to run cars on the highways of a town could only be valuable as connected with the right to run through the other municipalities. These franchises, therefore, are only links in a chain. The chain may have great value, but the links have no value, except for their being component parts of the chain itself. It is obvious that, to give a proper value to any link, the value of the entire chain must be first ascertained, and then an approximate apportionment would not be difficult. But the value of the chain largely depends upon the earning capacity for the time being of the entire property of the corporation used to do the business which the franchises permit to be done, and the value of the chain of franchises, ascertained in the mode adopted by the board of assessors,—and no better mode has been suggested, -requires a valuation of the entire corporate assets, and a separate valuation of all the tangible property in each municipality, and elsewhere situated; and then, by a process of elimination, the value of all the franchises together may be determined. It is possible that this might be done by local assessors, but in doing it they would be exercising something more than the usual local function of their offices. The appraisement by local assessors of property in another municipality would, if permissible, be a function never before exercised. They could not be protected in so doing by any principle of home rule. And if this is what would be required of them, I do not see how their local functions could be disturbed or diminished by the appointment of a state board to make this assessment. The property to be assessed is not in its nature localized in any one taxing precinct. It is not property over which the local assessor has ever exercised jurisdiction. In some cities and in some other municipalities it may be that the entire corporate property, including its franchises, is located within the municipal limits, but such cases make the exceptions rather than the rule.

I advise a reversal, and that the assessment be set aside, on the ground that the amendment to the general tax law creating a state board of assessors, and giving them power to assess the tangible property on, under, and over streets and public places, is an invasion of the functions of local assessors, and in this respect is a violation of the constitution.

SMITH, J. (dissenting). The legislative act, the constitutional warrant for which is here challenged, was passed in May, 1899. By its

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