New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-05-11
FRANCHISE
.4BOUT S4l.o00,0 o0 INVOLVED
4ttorney General Says assessments
Must Be at Full Valuation.

Albany May to.-The case Of the Jamaica Water
Supply Company against the State Board OF Tax
Commissioners important because Of the far-
ea ching effect the final determination OF the prin-
ciples of law involved Will have the collection
OF s4l 100000 on unpaid special franchise taxes row
in litigation IN this state-was argued today before
e 1he Court Of Appeals.
= Attorney General OMalley reDresentei the State
Board Of Tax Commissioners in to-day's argument
David Rumseg the City Of New York and r IL
Ven Eechten the Jamaica Water supply CoInpahE-
BY permission % the court additional bIlels were
fled by Paul d. Crayath. Walker D Hines. Jcseph
p Cotton IT. and Jarvis &. Carter. counsel LOT
The receivers Of the Metropolitan Street Railway
Company and the Third Avenue Railroad Company
Frank H. Plat and Henry ". Clark, counsel Tor
the Consolidated Gas Company, and George "a
briskie and Joseph p. Cotton jr-. counsel Tor the
Mutual Gas Light Company of New York, and by
William ". Webb. Corporation Counsel Tor the
City of Rochester
Attorney General O'Nialiey. who opened the argu-
nnent. said the record presented four questions
the s has the T hf G the lay state TAX
Commissioners bound in making special IRAN
whether there is any authority in Law emitting
the reator to have special franchise assessment
eoualized with the assessed valuation of other real
property in Queens County. -, CO.. hoard Of
Tax Commissioners assess special franchlse az
less than its fun value when the statute requires
gI,ch rTnnert, 10 he assessed ar full value and
provides that the state board must 50 certIN uIue
Whether the State Board Of Tax commissioners
reasSeSS a franchise AFTER fnef leiilel
ment has been set aside as III zi s 81 The An
power does not exist and the 9gc s1cis asses
n1ent against the reator for the year 1907 mas oee
wiped out
= The Attorney General oontended that the tax
Q commissioners. in determining the value Of spe
. cal franchise under the Law, cannot he hound ny
snv arbitrary rule or theory laid down by the coH'
This he said. would divest the state board OF the
right exercise the Judgment and sound dlscretloh
II by law and would give 10 II clerlcaI "I
min Il assessment
would be made by the court He continued:
The commissioners have the right 10 consider or
adopt any one or all Of the many rules as an a.; az
but that independent of all rules and theories, the
segment sound x d is knowledge
nation gathered as experts or from otneT IN
in reaching their determination as TO values. IN
other words the rule Of law applicable TO JuolCIa
review OF the asSeSe' 6 Ss state beard acts must
be reviewed by the courts Inc sac po its some
fundamenta! principle Of assessf hst or on erFoneous
assessment has been made.
The record in this case does not disclose what
rule fbe state hoard adopted whether any OF the
soecaIea Ts "; w. S,IsTT ,, what he regarded
as the net earning rule. and by such test the as
sessment not excessive. This view was slS
tanned by the special term. On appeal the Appel
late Division applied test again what 1t con
the value OF the franchise, according TO that tet,
was excessive The appellant contends that the
Appellate Division erred in the application IN wIlat
Is called the net earning rue, siLlu a. net
though the assessment Is IN excess OF me -
still valid and must stand
Mr.. O'Mauey also argued that there was no
power authorizing equalization of the special
franchise assessment, taxed at its full value with
other real property in the locality assessed at less
than full value. He added;
The statute gives such authority 1t is not an
assessment made by the same ofacers 1%ocs
authorities discharge their duty in accord
with the statutes and their oaJhS. because
they do assess real property at its ful value
The State Board Of Tax Commissioners dlschafge
theirs making the assessment at full value
Surely the public official or body. per
formed in accordance with the law. cannot be as
sailed aside by reason Of the Illegal acts OF
another official body Such principle has never
before been invoked in the judicial history OF this
p ,
II Is Of greatest Importance 10 the state the
VI localities and the htigant that the principles ~
xolved in this should be passed upon by TINS
thousand cases pending in the courts OF this
state. and upward Of S40O49.6r1 Is involved Inc
settling Of a very large percentage or tneSe taxes
.5epends final determination OF TWO main
questions involved in this case, namely:
Whether the rule for determining value OF prop
applicable TO all boards Of assessors Is 10 apply
TO the State Board Of Tax Commissioners.
Whether special franchise taxes are entitled 10
be eQualizec with other property
These questions are before The court-presented IN
all their phases by the distinguished counsel repre-
sentinS various franchise interests The rule
which the asks the court to lay down Is that
the State Board OF Tax Commissioners, IN deter
mining the value Of special franchise. may take
into consideration all facts and clrcunstan noes
Sithin their knowledge; they may rely upon their
they may draw information that viii aid them from
they may ConSlceT any or ali rules and
theories advanced TO aid in their Judgment but
The commissioners be bound in all cases by
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