Morning appeal. [volume] (Carson City, Nev.) 1877-1906, 1905-05-30
SUPREME COURT DECISION.
Continued From Page TWo.l


q. And you did not include that
in your result, did you?
A. No sir.
Mr.. Street. desire to move -
strike out the answer Of the witness
in his direct examination as to the
result of his examination concerning
The net earnings OF the Nevada Cen
trail Railroad COMPANY of 1901. for
it is shown now conclusively by hts
own testimony tina, this result is not
any result of the actual showing upon
the books of the Company at all. thar
the witness in reaching this result
took upon hinseift the province Of ali the
issues in this case. taking the province
At the jury and it is now shown con-
cusively that fictitious items Of re-
ceipts were computed by him to reach
mis- result it is further shown that
ne purposely excluded actual items
of expense actually paid by the Ne
vada Central Railroad Company in
i9O1, and the so-caIled result cannot
be permitted to go to the jury in this
case
Court The motion is denied.
Mr.. Street. We desire an exception
on all the grounds stated in the
motion. We desire to have it ex-
plicitly understood that we do not
waive any exceptions heretofore taken
or objections heretofore made to the
testimony of this witness and We de-
sire our objections to go to ali of his
testimony
OPINION
In order that clearer understand
ing may be had OF the essential facts
we have detailed important parts OF
the testimony relating to the man
issue in the case, the true cash value
OF the road IN 1891. 1t not being
shown or contended that the pros
pective is greater than the present
value it depends largely upou the
amount of earnings and expenses CT
operation.
Following decisions il other States
bis court long ago laid down the rule
that the cash value Of Railroad for
the purpose of taxation, which means
the amount at which the property
would be appraised if taken in pay
ment of a just cebt from a solvent
debtor, must be determined mainly
by its net earnings. capitalized at tt g
current rate of interest taking into
consideration any immediate prospect
OF an increase OF decrease in its earn
ing capacity. The actual cos. Of the
road may be shown. for prima facia
that is the value But il it appears
that the actual cost was in excess
Of the necessary cost. the necessary
cost is the proper standard Ii it
further appears that the net income
Of the road does not amount to. cur
IF inf e.
cost, ana it is not likely to 40 so
or If in short the utility Of the .roa
is not equal to its cost. then its value
is less than its cost ard must be
determined by il .,utilitv alone Fl
the road does not pa. current ex
penses and cannot be expected to q,
50. then it is worth ro more thar
the value of its movable material
less the cost Of taking il w and ge-
ting it to market State. Y. c. P. r
r Co. 10 Ney. -. State V v E. 7
X r. Co.. % Nev 295 In the latte
case it was said that Railroads ar
bought and sold so seldom and the valu
OF each road depends 80 entirelr upol
its surroundings. that in detarminin!
the amount we must rcsnr: 10 princ'
pies other than those governing ord
nary kinds of, property which, hav
a market value
It is apparent that a most importan
question here concerns the amour
the road. earns or ought to earn an
the necessary expenses Of Operatio
AS held by this court in State Y. V.
r r. r. Co.. "a New. So the net il
come Of q railroad. when necessar
To be determined for the purpose c
taxation is the difference between tn
gross receipts and necessary expens
under reasonably ,econim1cal and pr;
dent management The gross receipt
10 he considered for this PURPOSE ar
not necessarily those in fact receive,
but such receipts as would be reveive
under reasonably economical an
prudent management: and the e
penses to be deducted in order to d
termine the net income are not nece
sariiy the expenses which we're
tact, incurred, but such expenses ,
would be incurred under a reasonab
economical and prudent, management
Il is earnestly claimed for the Sta
that it was competent for the witnes
Nsestrattii to. give the result Of u
items in, defendants books which |
deemed properly .chargeable as IL
EXPENSES Of operation. and for him
reject OF. ignore in his answer. 9th
items that he. did not consider
GhsrEeabte and that he could give Il
xmonnt that In. his Judgment the col
panv ought to- have earned, beyoI
it's actual rec oiots., and state ;she n
ap1ornt that the company ought
have made THAT year. II Ia said
the brief that there are many thinl
such as a four,il,hand, or the cast
% the mountain ut Austin. that, ey'
. stupid witness would know we
not necessary in the operation OF
railroad. For the defendant II is 1
serted that eyerythipg. charged as G
oenses In It's books is presumed tn
necessary for its. operation. ard tn
the witness for the State could r
.iEo his c0ncluSiona which snirhx nv,