The sun. [volume] (New York [N.Y.]) 1833-1916, 1903-04-29
FRANCHISE TAX Law VALID.
UNANIMOUS DECISION ~ THE
COURT or APPEALS.

Companies VIII Appeal to &. \. supreme
Court--Meantimc Some el5 ,OOO. 900
Back Taxes May or May Not De Paid
to the City-Opinisn written by Judge
vann Re,ersing the Appellate Division
1t u Held That the legislature In
Creating . New syrtem OF Taxation.
Embracing New Kind Of Property Net
Taxed BEFORE. Could lntrtlst Taxing to
state Omcers without Violating Home
Rule Provision Of the Constitution.
The Court Of Appeals by a unanimous
decision decides that the Franchise Tax
law. declared unconstitutional by the APP
pellate Division, is valid. The decision
Immediately affects the following corpora
tons of this city:
The Metropolitan Street Railway Com
pany, the Twenty -third Street Gross
town Railway Company. the Brooklyn
City Railway, the Coney Island and Brooklyn
Heights Railway Company, the ConsolidAsed
Gas Company. and the New Amsterdam
Gas Company. These companies pooled
issues and went to the Appellate Division,
the Supreme Court. which sustained their
contention that the Franchise Tax law
was unconstitutional.
The argument before the Appellate n
vision was made by William H. Page. Jr..
who urged that the law was unconstitu-
tional on practically the sole ground that
the companies, when they received their
franchises from the city. paid certain taxes
in fulflment Of the terms Of the contracts
under which the franchises were granted
Therefore. having been taxed once, Mr..
Page argued. the companies could not be
taxed a second time by the State. This
contention was upheld by the Appellate
Division.
When the case went to the Court Of APP
peals, IL was concluded, by q vote OF coun-
eel, that ex-Judge Charles r. Brown Of
Newburg and the Hon. David B. Hill should
make the principal arguments. Frank H.
Plat and Mr.. Page were sandwiched In
between Judge Brown and Senator Hill.
The point upon which the companies won
before the Appellate Division was not the
one which was most strongly urged before
the Court OF Appeals and the decision was
against them. -.
The attorneys who appeared for tho APP
pealing companies were: William H. Page.
Jr., and Judge Brown for the Metropolitan
Street Railway Company: Frank H. Plat
for the Consolidated Gas Company. Prof
Charles A. Collin of Sheehan 4 Collin. for
the Brooklyn street railway companies.
and David B. Hill as general counsel for
all the corporations. Mr.. Page and Prof.
Collin were asked yesterday afternoon
what they were going TO do in reference
TO the decision. Mr.. Page said: ,s.- $
Speaking for the Metropolitan Street
Railway Company the decision Of tho
Court OF Appeals will DO appealed from to tho
United States Supreme Court, The grounds
on which the appeal will BE- taken are two;
First. that no State may pass Law i'm
pairing the obligations Of contracts: and.
second, that no citizen Of tho United States
may be deprived Of property without due
process OF law. -t-->
The precedent for going tn the United
States Supreme Court on the contract
violation question was established In the
Dartmouth College case years ago. We
hold that. since the railroad companies
paid certain price for the use Of the streets
of New York. they were then taxed on the
franchise and that they may not legally
be taxed again. The case will be taken to
the United States Supreme Court with all
expedition pos sible, but doubt very much
Prof Collin said: I'm behalf Of my clients.
the Brooklyn traction companies. ! have
no hesitancy in saying that an appeal will
he taken TO the United States Supreme
Court; .,.,u
established that we were taxed once when
we got our franchises from the city. and
that, therefore. we cannot bs taxed again.
On the other question, that no citizen
Of the United States can be deprived OF
a \ Of In
the reasoning appears to me 70 he clear
If we do not pay our taxes. our properly
will be sold al auction for the collection
thereof. Therefore, we hold that eince
We have been taxed unconstitutionally.
we cannot be deprived Of our property
II We refuse to pay the tax,
Moet appeals from decisions Of lower
courts act as st8vs OF execution OF Judg-
ment. Such Ia not the case. however,
in appeals in cases Of this kind taken TO the
TO be the opinion 81 all the lawyers retained
by the corporations that withetanding
the appeal to the United States Supreme
Court. the corporations would be Obliged
to pay their taxes as levied, unless some
arrangement were made with the Attorney
General.
It was said that. pending the decision Of
the United States Supreme Court the state
would hardly care TO collect the taxes due
from the various corporations and then.
the Franchise Tax law to he unconstitu-
tional, be Obliged to refund the taxee paid.
Therefore II was concluded that the At
torney- General would advise that the col
lection OF the taxes be left in allegiance
pending the decision Of the United States
Supreme Court,
OF course, every corporation using the
surface or sub-surface Of the streets 1.
affected by yesterdays decision. All Of
the companies have appealed from the
decision OF the State Supreme Court but the
cases Of the Western Union Telegraph
Company, for instance. and the Manhattan
Elevated Railway Company and the conduit
companies have not been reached by the
Appellate Division. II is assumed that
these other cases will not be pressed for
argument until the United States supreme
Court renders q decision.
Comptroller circuit was greatly pleased
by the decision. He said: As a lawyer,
I have believed. all along, that the Fran
chise Tax law was constitutional. As
Comptroller, / am pleased because OF the
additional revenue Il will bring 20 the city.
Pending this decision. the borrowing. ca
pacity Of the city was reduced by about
S22 600 o00 Now that the law has been
declared constitutional, the debt limit
win be raised by that amount.
The total amount OF taxee levied In this
city under the Franchise Tax law for the
years 1900, 1901 and i902 was ei<,eh,i<e.o.
The valuation Of the properties. taxed In
thosa warn for the WAR f00S Ia e1SS i6 ,016.