The times. [volume] (Washington [D.C.]) 1897-1901, 1901-02-18
TAXATION OF FRANCHISES.
Michigan Supreme Court Holds Them
to be AssessabIe.

| to be Assessable.
| LANSING. Mich. Feb. 1.-THE State
! Supreme Court, in the case OF the De-
troit Citizens Street Railway Company
vs.. the Detroit Common Council. upholds
the legality OF the action of the Detroit
assessors in including in the value OF the
property of such corporations as street
railway and gas companies the value
given to it by the public franchises which
| they enjoy.
The street railway company asked for
mandamus to compel the council to
either strike the assessment from the rolls
OF reconVene and strike from the assess
ment certain sums alleged to represent
the values placed upon the company's
irahchise and place upon the roll its per-
sonai property at the actual cash value
OF It's tangible personal property subject
to taxation
The propriety of treating properties as
unit is declared by the court to be as
natural and proper for the purposes of
assessment as for SALE and especially so
where the various articles are so essen
tial to the purpose for which they are
combined that the withdrawal of one
would destroy or substantially impair the
use OF all for the purpose to which in
their new form. they are adapted
The court gays 1t may take judicial
notice OF the fact that the railroad has
large market value much in excess of any
amount thai it would have were 1t to be
dismantled and the parts sold separately.
Again says the court, 1.-The assess
ment of a steam railroad in a continuous
right of way through the State over de-
sirable route and in use has a much
greater value thin the same kind OF
right not ir use or In small disconnected
parcels or in remote region, where it
cannot be used profitably. Manufacturing
establishments and large buildings favor
ably located and adapted to special uses
Illustrate the same principle, and we
think 1t is incorrect TO say that the rec
ognition Of this principle and its con-
sideration in assessment is taxing the
good will of the business, which. like
executory contracts. has not usually been
thought to be taxable
The contention that IL an intangible
license to do an exceptional business is
not made taxable property by express
statute it cannot be taxed Indirectly was
considered; but the court concludes that
it is clear that the property should be
taxable and at it's cash value whatever
it may be that causes the value.
''If. as claimed. the street railway
property is worth and would bring with
the franchises that are inseparable from
IL and necessary to go with II, from &c.
900 900 to SIS. 000, 900. its owners have no
right to expect to be taxed on a basis of
81, SOC. 900, and the court feels confident
tina, the Legislature never contemplated
a construction of the tax law that would
justify it. Whether the property is worth
such a sum is not for us to decide That
question is for the assessors and Board of
Review, and. as held by the learned cir
cult judges. their determination cannot be
disturbed if regular and not fraudulent.
A significant and important statement
in TIE opinion is the following:
Whatever may be thought of the effect
of this case upon the right to tax the good
will of business or the ability of the
owner of property to use it to extraordin-
airy advantage, which We find it unneces-
sary to approve. we consider 1t a strong
support to the doctrine that the tangible
property of street railway company may
be assessed as a unit, and that the loca-
tion of its easement and tracks, as to en-
vironnient and the period that it may law
fully use it, and any other exceptional
privileges inseparably connected with it,
value; or, in other words, the assessor
may not eliminate them by making reduc-
tions in the clear value of the entire
plant. Unlike the good will of merchant
or manufacturer, which is ephemeral,
these are part and portion OF the right to
make use of the property for the purpose
for which it is adapted