Case Name: ULSTER COUNTY v. STATE
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903-01-14
Citations: 80 N.Y.S. 128
Docket Number: 
Parties: ULSTER COUNTY v. STATE.
Judges: 
Reporter: West's New York Supplement
Volume: 80
Pages: 128–138

Head Matter:
(79 App. Div. 277.)
ULSTER COUNTY v. STATE.
(Supreme Court, Appellate Division, Third Department.
January 14, 1903.)
1. Taxes — Disposition—Construction op Statute.
Laws 1869, c. 907, as amended by Laws 1871, e. 283, providing that “all taxes,” except school and road taxes, collected in any town on the assessed valuation of any railroad in said town, for aid in the construction of which road said town has issued or shall issue bonds, shall be paid over to the treasurer of the county in which said town lies, and the money shall be used as a sinking fund for payment of such bonds, relates solely to the disposition of the taxes authorized to be collected under existing tax laws, and includes taxes levied and collected for state, as well as county and town, purposes.
2. Action by County — Money had and Received — Claim against State.
Under Laws 1859, c. 312, providing that the state tax which each county is to pay shall be assessed by the county supervisors, and included in and collected by the annual collection of taxes in the several counties, in the manner prescribed by law, on failure of the supervisors to do which they may be proceeded against by the comptroller to compel them to do it, and Laws 1855, c. 427, § 2 providing that the county ■treasurers shall by a certain time pay to the state treasurer the amount of the state tax, if any, raised and paid over to them, and section 12, providing that in case of their neglect to do so they may be compelled to do so by action by the attorney general, the county is not a debtor to the state for the state tax apportioned to be raised in it; and a county treasurer, having paid to the state all its tax, without deducting the part collected on the assessed value of railroads in towns, for aid in construction of which roads the towns have issued bonds, though Laws 1869, c. 907, as amended by Laws 1871, c. 283, provides such part of the tax shall be paid over to the county treasurer as a sinking fund for payment of the bonds, the county, given by Laws 1899, c. 336, such rights in reference thereto as the town would have against the state were it an individual, may recover as for money had and received.
Smith and Chester, JJ., dissenting.
Appeal from court of claims.
Action by the county of Ulster against the state of New York. From a judgment dismissing the claim of the county, it appeals. Reversed.
The proceeding was commenced August 10, 1899, under the provisions of chapter 336 of the Laws of 1899, to recover from the state $42,890.10, the amount of taxes collected from and paid by railroads in the towns of Ulster county bonded to aid in the construction of such railroads, and paid by the county treasurer to the state.
Argued before PARKER, P. J., and SMITH, KELLOGG, CHASE, and CHESTER, JJ.
John J. Linson (John F. Cloonan, of counsel), for appellant.
John C. Davies, Atty. Gen., and George H. Stevens (O. B. Glezen, of counsel), for respondent.
Johnson & Charles, for Wyoming County.

Opinion:
KELLOGG, J.
Laws 1869, c. 907, as amended by Laws 1871, c. 283, relates solely to the disposition of the taxes authorized to be levied and collected under the then existing tax laws. The act does not pretend to change the general scheme or existing method of raising money by tax. It simply says that money raised through existing methods from railroad property in bonded towns, for whatever purpose, shall be paid to the treasurer of the county, to be used for a special purpose there stated. This says all taxes so raised, and the taxes authorized to be levied and collected under the general law were taxes to defray the expenses of state government, the expenses of county government, and the expenses of town government. The charitable purpose of the act of 1869 was doubtless based upon the idea that since these towns, by bonding, had in a measure created a taxable property within their limits, such towns had some equitable claim upon the taxes assessed thereon for a period of years, or so long as the bonds were unpaid. This would not interfere with the equitable right of any other town in the county, nor with the rights of any other county in the state. It was new property created by the bonded towns. In any event, it is not disputed but that the legislature had the power to direct the disposition of these taxes; nor is there room to doubt that it did dispose of all the taxes on this property authorized to be raised for any purpose whatever. I suppose that, if the legislature had said that the taxes so assessed on these railroads should be paid by the county treasurer to the state superintendent of public instruction for school purposes, there would be no question as to the right of the treasurer to deduct such payment from the amount to be sent to the comptroller for state uses; and I fail to see that' the person to whom payment is to be made or the purpose to be served by such payment makes any difference, so long as the state has power to determine for itself the disposition of the tax.
The contention that, notwithstanding the state has directed the appropriation of the tax to a specified object, still the county must reimburse the state for the taxes so by the state devoted to such special object, has no support in the act of 1869; nor can it have, in my opinion, in the general tax laws, or in any other law. It would be a great injustice to the towns not bonded to require them to make good to the state money so by the state appropriated in aid of the bonded towns. It must be borne in mind that the sum which the plaintiff was called upon to pay for state uses is based upon the valuation of all taxable property in the county, including the valuation of the railroad property in bonded towns. If such railroad property constituted one-half in valuation of the entire property of the county, it is plain that the gross sum required to be paid to the state would be double what it should be if the railroad property were left out; and the property in the county, other than the railroad property, would be burdened unjustly and unequally as compared with other counties of the state,— a condition which the legislature has shown no intention of creating.
Section 8, c. 312, Laws 1859, after providing for equalization of values between counties of the state, provides:
"The comptroller shall immediately ascertain from the assessment the proportion of state tax each county shall pay and send a statement of the amount by mail to the county clerk, and chairman and clerk of the board of supervisors of each county."
Section g provides:
"The amount of state tax which each county is to pay, so fixed and stated by the comptroller as aforesaid, shall be assessed by the supervisors or other officers authorized to make the assessment of state taxes, in the tax roll of the calendar year, and shall be included in and collected by the annual collection of taxes in the several counties in the manner prescribed by law."
In case of failure by the board of supervisors to do this, the comptroller may proceed by mandamus to compel this to be done.
Section 2 of chapter 427 of the Laws of 1855 provides:
"The several county treasurers shall, on or before the first day of March in each year, pay to the treasurer of this state the amount of the tax, if any, raised and paid over to them respectively, retaining the compensation to which they may be entitled."
Section 12 provides that, in case of neglect of the treasurers to pay over the moneys by them received, they may be compelled to do so by action brought by the attorney general. This is the present law, except the time of payment has been changed from March 1st to April 15th and May 1st.
It will be seen from this that the state tax is to be collected like the taxes for county and town purposes; that the amount to be levied in any county is based upon the valuation of all the taxable property in the. county; that the state relies upon the county and town officials to obtain the state tax by the methods pointed out in the tax law; that it does not make the county a debtor to the state for the state tax apportioned to be raised in any county, but exacts from the county and town officials the performance of duties which will result in the collection of the state tax. This is made further apparent from the provisions of the tax law which impose the collection of taxes on nonresident lands upon the comptroller, and in that respect relieves the county and town officials from all duty respecting the collection of such taxes. While I think that it is or must be conceded that the state has a right to do as it pleases with the state tax, when collected, and while it is or must be conceded that by the act of 1869 it disposed of a portion of the tax by directing that all state taxes collected on railroad property in bonded towns should be held by the county treasurer for the benefit of the towns bonded, I fail to see how it can be fairly reasoned that the state in fact gave up no portion of its state tax. The fact is that the portion of the state tax which by the terms of the act of 1869 it surrendered to the bonded towns was received by the state without reference to this previous disposition. There can, I think, be no doubt that, if this were a transaction between individuals, the party aggrieved by the action of any third person in paying over the money might recover in a suit for money had and •received,'and it seems that if, under the facts, such an action would lie between individuals, the act of 1899 (chapter 336) gives a right of action against the state. The county is, by that act, to be treated as possessed of all the rights of the bonded towns, and the original right of action by the bonded towns in equity preserved and confirmed in the county.
The judgment of the court of claims should be reversed, with costs, and a new trial granted.
CHASE, J., concurs.
PARKER, P. J.
I cannot concur with the theory, adopted by the court below, that the state did not intend to itself bear any of the burden which the bonds issued for the purpose of constructing "the new railroads in the several towns imposed upon those towns. Nor do I agree that chapter 907 of the Laws of 1869 does not change "the action of the board of supervisors or the duties of the comptroller in determining the amount of the state tax chargeable to each county" in which such newly created property exists.
The argument to sustain such theory is that no amendment is made to the general tax laws of the state; that under such laws the supervisors must still return to the comptroller the total assessed valuation as it appears upon the tax rolls of the county; that upon such valuation the comptroller estimates the amount which is the county's share of the whole state tax, and that, when the county is notified of that amount, it is its duty to pay to the state that amount, even though it for any reason fails to collect it; that such amount, under the general tax laws, becomes a debt from the county to the state, and that, so long as those laws remain unchanged, such method of levying the state tax must be followed, and the county does in each year become liable to the state for the amount so fixed; that the act of 1869 itself does not make any change in this method, and that none should be inferred therefrom, unless it appears in plain and distinct language; that hence the amount which the state has annually received from the county of Ulster was in all respects regularly levied, and was no more than it was entitled to receive. To this I answer that no question of sharing a burden can arise in the case. The railroad property affected by the act of 1869 was new property, created by the bonded towns, and for the construction of which it issued the bonds. By omitting to place this new property upon the assessment roll of the county, the total valuation of the county's property would not be at all diminished. By appropriating the taxes raised from it to a purpose other than the expenses of government, no less taxes would be available for that purpose than were raised before. The statute of 1869, therefore, imposed no burden upon either town, county, or state. It simply left matters as they stood before. It operated to prevent an increase of the assessment roll and of the taxes collected, but it diminished nothing.
It is true that no change was made in the method of ascertaining the amount which a county was to pay of the state taxes; nor are there any specific directions, in the act of 1869 or-elsewhere, which change the method of making up the return to the comptroller of the aggregate valuation of the assessment rolls of the county; nor does the act of 1869 in terms provide that such railroad property shall not be included in the assessment rolls, but it does in clear and explicit terms provide that no taxes collected from such property (except those that are levied and collected by the local officers in highway and school districts) shall be applied to the purposes of taxation. Beyond all controversy, such act effectually prohibits the taxing of such new-made property for the purpose of raising any part of the sum which the state may ask from the county. Clearly, the provisions of the act of 1869 cannot be observed, if the value of the railroad property is to be included in the valuation of the property in the county which is to pay taxes therein. Under the tax law's, the sums needed for town expenses and for county expenses are to be raised from all property therein liable to taxation. The collection of all taxes in the county, for whatever purpose needed, must be made up on that basis. Therefore an act which prevents the use of any species of property for that purpose in fact operates to exempt such property from taxation, no matter in what language it is phrased. When a statute provides that none of the taxes raised upon such railroad property shall be applied to the payment of taxes, but shall be paid over to a trustee for the benefit of a specified sinking fund, it very effectually exempts such property from that which is, under the general tax laws, required to be placed upon .the assessment rolls as property amenable to taxation. True, the statute describes the sum which is to be paid into the sinking fund, as "taxes"; but it is clear that they are not "taxes," nor is that property to pay "taxes," within the meaning of the general tax laws. The machinery of such laws is by the act of 1869 utilized for the purpose of collecting from the railroad company an annual sum, from which the town bonds may be finally paid; but, by the same act, it is forbidden to use such machinery for the purpose of collecting from such property "taxes," properly so called. No sum may be collected against such property for the purpose of paying governmental expenses, either of town, county, or state.
The situation, then, is this: By its general tax laws the state provides that each county shall pay its quota of the annual state expenses, estimated upon the aggregate valuation of its property appearing upon its assessment rolls. Under the provisions of such laws, none but property liable to taxation is to be placed upon such rolls, and evidently the scheme of such laws is to enable the county to collect by taxation the sum which is so ascertained and demanded by the state from it. Subsequently the state by another act prohibits the county from collecting by taxation against a specified portion of its property any taxes whatever. By the act of 1869 it clearly said to the county of Ulster: "You may not collect from the new railroad property within your limits any portion of the sum which hereafter will be demanded from you as your share of the state's annual expenses." That such is the effect of the act-of 1869 is beyond controversy.
Now, reading all those laws together, is it to be supposed that the state intended to require the county of Ulster to include within its assessment roll the value of the new railroad property, and to report it as a part of the aggregate valuation, upon which its share of the state expense was to be ascertained? Was it the states intention to make the county value it as a basis of ascertaining the county's liability, but to prohibit it from collecting therefrom anything to assist in discharging that liability? On the contrary, it is clear to me that the act of 1869 can be given a just and intelligent operation only by considering it as exempting such railroad property from the taxable property of the several towns. This provision of the act should be read into the general tax laws of the state, and in making up the assessment rolls of the several bonded towns the railroad property should never have been placed thereon as property liable to taxation. Indeed, this statute has been substantially so construed in Clark v. Sheldon, 106 N. Y. 104, 12 N. E. 341; and it is difficult to understand how the act of 1869 is explicit enough to remove such railroad property from assessment and taxation for town and county purposes, yet not explicit enough to remove it from taxation for the purpose of raising the county's share of the state tax; and more difficult yet is it to understand how it is specific enough to remove such property from taxation for the purpose of satisfying the state's claim, but not clear enough to prevent it from being included in the estimate by which the state's claim is ascertained.
In my judgment, the various amounts claimed in this action were not regularly assessed and collected by the state against the county. They were estimated upon a wrong basis. The board of supervisors of the county erred in including the valuation of the railroads in the amount that it returned to the state comptroller, and the state's claim against the county was, therefore, in each year, too large. Hence it has in fact received a larger sum in such years than it was lawfully entitled to: Much of this money, so overpaid to the state, the county has refunded to the towns. Some of it, as I understand the case, has never been refunded. The act of 1899, under which this proceeding has been instituted, authorizes a recovery by the county if a cause of action is shown against the state, either in behalf of the county or the town, and provides for a proper division of the recovery between them. The state having received moneys to which it was not entitled, it should, ex aequo et bona, refund it; and under the provisions of the act of 1899 that seems to be sufficient to allow a recovery in this proceeding.
In my opinion, the judgment appealed from should be reversed, and a new trial granted.