New-York tribune., 1910-02-19
NEED NOT PAY TAX
L4COMBE SO RULES.
No Present Change in Status
of Harlem Road.

5udre I.acornbe decided yesterday in the
United States Circuit Court that the status
Of the Harlem Railroad Company as OWL
er of the Fourth avenue, Madison avenue
ssth street crosstown and Eighth and Ninth
avenue railroad companies should not ne
changed Just yet. He also refused 10 oroer
the repay1nent Immediately of the Si"o'eoo
given fy the Harlem 10 the city in settle
r1ent OF The franchise tax lien
In the petitions upon which Judge La
cornhe passed was an inquiry regarding
tho application OF the national corporation
eNcis. lax 10 corporations in the hands
of a receiver or receivers OF TINS the
court said that the act contained no pro-
vision covering that phase of business, and,
Furthermore. II was not thought that Con-
rress intended TO include bankrupt cor
porations with no net income. whose prop
critics were being administered by the court
lie added:
Il would seem 10 be sufficient IT, at the
time fixed BY tho act for making returns a
statement he fled with the proper ofilcer
showing that these roads are in the hands hands
Of receivers Whether tie various lessor
companies are or are not WITHIN the terms
of the act as corporations carving on
business and receiving net income is d
rr5ssfion which they viii. Of course. De
ierrnine for themselves upon the advice O
counsel
II The tax should lie properly assessed
upon them. Judge Laconhe added, the
question Of whether it should he paid by
the lessee or lessor would be deterfninen
when il came up. The present decision,
Re said would not affect such determina-
ton one way or the other
In the petitions of the Harlem and other
companies the court Was requested TO III
strrct the receivers Of the Metropolitan 10
eject Thett her they would assume or ADOPT
the leases. or whether il should be deter
mined that ire companies may re-enter
and renossess their property. The court
called attention 10 the fact that in the de-
cree Of foreclosure it had inserted a pro
vision which instructed the receivers 10
take no action which might he construed
as an elecrson prior 10 sale. As an appeal
had been taken from that. Judge LacoInhe
said i would he indecorous for the court
10 oanstr1fe further on the subject pending
decision
As the receivers reported that the Har-
lcm lines were in bad condition. Judge La
connie directed that immediate action
he taken 70 make all necessary repairs
The cost viii he sSl3 500. The same direc-
tion was given regarding the Eighth
avenue ana the Ninth avenue companies
repairs fer which will cost S505.S50.
Receivers Joline and Robinson Of the
Metropolitan in a petition set forth that
The unpaid franchise taxes of all lines Of
The system for the years 19G-'o9 were in
excess Of $5.o20,09o. Judge Lacombe. re-
ferrins 10 this. said:
Receivers should take up the matter of
adjustment OF all their special franchise
taxes with the state officers, and. if they
succeed IN effectins a liquidation the
eQNaiIzed and revised basis the court Will
authorize The issue OF receivers certificates
u an amount sufficient. with the money
already reserved TO cover the last two
years To make up the total sum necessary
10 be raid, including repaymen TO the
Harlem company of the S49e.at0 already
advanced TO the collector Of assessments
Should foreclosure sale take the property
out OF the receivers hands before such
adiustnIent can he effected. they viii at
least have preserved the property intaC:,
without the disinteSration which would
necessarily result from making default IN
Ger the leases.