Case Name: PEOPLE ex rel. NASSAU ELECTRIC R. CO. v. GROUT, Comptroller, et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-04-26
Citations: 103 N.Y.S. 975
Docket Number: 
Parties: PEOPLE ex rel. NASSAU ELECTRIC R. CO. v. GROUT, Comptroller, et al.
Judges: 
Reporter: West's New York Supplement
Volume: 103
Pages: 975–976

Head Matter:
(119 App. Div. 130)
PEOPLE ex rel. NASSAU ELECTRIC R. CO. v. GROUT, Comptroller, et al.
(Supreme Court, Appellate Division, Second Department.
April 26, 1907.)
1. Taxation—Assessment—Statutory Provisions—Street Railroads—Fran-
chise Tax.
Laws 1899, p. 1593, c. 712, § 46, relating to the taxation of special franchises under the general scheme that they be assessed at their value, without any diminution for any local public charges thereon, provides that the local public charges shall be deducted from the tax, when levied, whether paid under an agreement therefor or under a statute requiring • the same. Held that, under the statute, not only, sums paid as taxes may be deducted from the franchise tax, but also sums paid under agreement, and hence payments made by the relator, a street railroad company, under an agreement requiring it to pay 5 cents the round trip for each car running across the Brooklyn Bridge, are within the meaning* of the statute.
2. Same.
Where the relator’s contract right to run its cars across' the Brooklyn Bridge has been treated by the state as a special franchise for the purposes of taxation, the city comptroller cannot refuse to make a reduction of the local public charges from its franchise tax on the ground that it is not a special franchise.
Appeal from Special Term, Kings County.
Mandamus by the people, on the relation of the Nassau Electric Railroad Company, against Edward M. Grout, as comptroller of the city of New York, and another, to compel defendants to deduct from the relator’s franchise tax the local public charges. From an order denying the relator’s application in part, it appeals. Modified and affirmed.
Argued before HIRSCHBERG, P. J., and WOODWARD, JENKS, HOOKER, and GAYNOR, JJ.
Edward W. Hatch (Charles A. Collin and John L. Wells, on the brief), for relator.
George S. Coleman, for respondents.

Opinion:
GAYNOR, J.
The scheme of the statute for the taxation of special franchises (incorporated in the tax law) is that they are assessed at-their value without any diminution for any local public charges thereon, and that such charges are to be deducted from the tax when levied. Section 46 (Laws 1899, p. 1593, c. 712) requires that if there has been paid to the city, town or village for the tax year, "under any agreement therefor, or under any statute requiring the same, any sum based on a percentage of gross earnings, or any other income, or any license fee, or any sum of money on account of such special franchise, granted to or possessed .by such person, copartnership, association or corporation, which payment was in the nature of a tax," all amounts so paid shall be deducted from the tax. In this there are two inconsistent phrases applied to the payments mentioned, the one "under any agreement therefor," and the other "in the nature of a tax" (if the latter refers back to the former), for that which is paid under an agreement is not of the nature of a tax. A tax is an exaction of sovereignty, and not something derived from an agreement. This inconsistency and lack of scientific precision affects the interpretation of the statute. It cannot be said that only sums paid as taxes may be deducted, for the statute classifies sums paid under agreement as taxes—which they may be in a loose sense—and directs them to be deducted.
The relator runs its cars across the Brooklyn Bridge under an agreement with the city requiring it to pay a toll of 5 cents the round trip for each car. This payment is within the meaning of the statute, provided the relator's contract right to such use of the bridge is a special franchise. Inasmuch as the state has treated it as such and assessed it, it is not open to the city comptroller to refuse to make the deduction on the ground that it is not. If the tax is to be imposed and collected the deduction must be allowed.
The order should be modified accordingly.
Order modified, in accordance with the opinion of GAYNOR, J., and, as modified, affirmed, without costs. All concur.