1 
 
 
 Argued by Alex. _ 
 
 Of Counsel foT^Relator- 
 Appellant-Respondent, 
 
 129 Townsend Avenue, 
 Stapleton, Staten Island, 
 New York. 
 
 3ln ttjp flinurt of Apppala 
 
 STATE OF NEW YORK. 
 
 fy 
 
 The People of the State of New York 
 . el rel. The N. Y. C. & II. R. R. R. Co., 
 Relator- Appellant-Respondent, 
 
 against 
 
 The State Bo.a.rd of Tax Commissioners, 
 Defendants-Respondents, 
 
 and 
 
 The City of New York, 
 
 I ntervenor-Respondent- Appellant. 
 
 Assessments of 
 1900 and 1908 
 
 BRIEFS IN BEHALF OF KELATOB- 
 APPELLANT-UESPONDENT. 
 
 Ira a. Place, 
 
 Alex. S. Lyman, 
 
 Attorneys for Relator- Appellant- 
 Respondent. 
 
HEDRICK 
 
 Ai'ijued by Alex S. Lyman 
 of Counsel for Relator- 
 Appellant-Respondent. 
 
 IN THE 
 
 (Eourt of Apprala 
 
 State of New York. 
 
 The People of the State of 
 New York ex rel The New 
 York Central and Hudson 
 River Railroad Company, 
 
 Relator-Appellant- 
 
 Respondent, 
 
 against 
 
 George E. Priest, J. Edgar 
 ^ Leaycraft and Lester F. 
 Stearns, together constituting 
 the State Board of Tax Com- 
 missioners, 
 
 Defendants-Respondents, 
 
 and 
 
 ^ The City of New York, 
 
 Intervenor-Respondent- 
 
 Appellant. 
 
 (Assessment of 1900.) 
 
 1 
 
 BRIEF IN BEHALF OF RELATOR- 
 ^ APPELLANT-RESPONDENT. 
 
 _ Statement. 
 
 * 
 
 These are cross appeals by the relator, and l)y 
 ^he City of New York, intervenor, from an order 
 c> of the Appellate Division, Third l)e{mrtment, 
 entered in the office of the Clerk of Albany County 
 
 I I I 6490 
 
9 
 
 on the 26tli day of March, 1912, unanimously 
 affirming (fol. 2308a) a final order (p. 745, fol. 
 2233), entered in the office of the Clerk of Albany 
 County on the sixth day of March, 1911, on direc- 
 tion of the Hon. Alden Chester, Justice, modify- 
 ing, and as modified, affirming the assessment 
 made in the year 1900 by the defendants consti- 
 tuting the State Board of Tax Commissioners, 
 upon the property of the relator as a special 
 franchise tax assessment. The modification con- 
 sisted of reducing the assessments made by the 
 defendant State Board of Tax Commissioners in 
 the Slim of $10,192,000. to the sum of $6,828,640. 
 in order to equalize it with assessments of other 
 real property, not special franchises, located in 
 the same tax district, namely. Borough of Man- 
 hattan, City of New York. 
 
 Statement of Facts. 
 
 The defendants, the State Board of Tax Com- 
 missioners, have assumed to assess as a special 
 franchise the railroad of the relator, leased from 
 the New York and Harlem Railroad Company, 
 extending upon, under and over a strip of land 
 known as Park (formerly Fourth) Avenue, in the 
 Borough of Manhattan, City of New York, from 
 the southerly line of 45th Street to a point near 
 133rd Street, at which point the railroad turns 
 easterly from Park Avenue, crosses private prop- 
 erty owned by the Railroad Company between the 
 easterly line of Park Avenue and the southwest- 
 erly bulkhead line of the Harlem River, thence by 
 bridge over the Harlem River, and thence over 
 the private right of way of the Railroad Com- 
 pany. 
 
 While our purpose is to set forth with neces- 
 sary detail under the Points of this brief the 
 
3 
 
 somewhat voluminous facts with reference to the 
 origin and history of this railroad, it seems perti- 
 nent, by way of i)reliininary, to sketch brielly the 
 situation of this case, the questions which are pre- 
 sented on this appeal, and the situation of the 
 law bearing on the questions involved, which has 
 developed considerably since these proceedings 
 were instituted. 
 
 This railroad was originally chartered by 
 Chapter 263 of the Laws of 1831 for the purpose 
 of connecting what was then the upper part 
 of the old City of New York with the then village 
 of Harlem. A system of paper streets shown on 
 the city map filed in 1811, but in 1831 unopened, 
 covered the entire northerly portion of Man- 
 hattan Island, consisting then wholly of farming 
 and grazing lands, excepting the small settlement 
 comprising the Village of Harlem. The respect- 
 ive termini of the railroad were 23rd Street and 
 the Harlem River. The Railroad Company was 
 authorized to locate its railroad within the limits 
 of the Eighth Avenue on the west and the Third 
 Avenue on the east. Obviously the location of 
 the road had to cross 110 ))appr streets run- 
 ning east and west, or occupy longitudinally a 
 paper avenue running north and south. In either 
 event the company was required under its charter 
 to secure the consent of the city to crossing or oc- 
 cupying such streets whether opened or not. The 
 Railroad Company, with the consent of the City, 
 accordingly filed its niaj) locating its railroad 
 on an avenue shown on said city ina)), filed in 
 1811, as Fourth Avenue. The latter at that time 
 was opened northerly only so far as 38th Street ; 
 above that point the land indicated includefl within 
 the mapped street was privately owned. The Rail- 
 road Company entered into an agreement with the 
 
4 
 
 City, of date January 9tli, 1832, with reference 
 to the occupation of Fourth Avenue, and acquired 
 title to its right of way north of 38th Street by 
 grants from the owners, by condemnation pro- 
 ceedings, and by permission from the City of 
 New York, which in its private capacity was the 
 owner, under the Dongan and Montgomerie 
 Charters, of a large tract of land known as the 
 Common Lands lying along both sides of Fourth 
 Avenue, between 48th and 84tii Streets. The Rail- 
 road Company entered into possession of its en- 
 tire right of way for purposes of construction in 
 or prior to 1833, and its railroad to the Harlem 
 River was completed in or about the year 1837, 
 and has been since continuously operated. 
 
 In 1850 the City commenced, and in 1853 con- 
 cluded, under the general Act of 1813, a proceed- 
 ing to open Fourth Avenue from 38th Street to 
 135th Street, or the shore line of the Harlem 
 River. In this proceeding the title of the Rail- 
 road Company was recognized, and an award of 
 one dollar made for each segment of its right of 
 way between the center lines of cross streets, the 
 railroad at the time having been for over 20 years 
 in actual physical occupation of this strip of land. 
 
 By Chapter 702 of the Laws of 1872 the Legis- 
 lature required the Railroad Company, and the 
 City of New York, to improve Fourth Avenue, by 
 tlie elimination of all grade crossings, and by ab- 
 solutely separating the railroad use and the street 
 use from the strip of land known as Fourth Ave- 
 nue. The City contributed heavily to the expense 
 of this improvement. 
 
 By Chapter 339 of the laiws of 1892, and 
 amending acts, the Legislature required a further 
 improvement in Fourtb Avenue at the northerly 
 end thereof, in effect closing u]) the deju’essed 
 cut which bi-sected the avenue from 115tb Street 
 
o 
 
 north, and in which the railroad tracks ran, and 
 substituting in place thereof an elevated railroad 
 viaduct structure. To the cost of this improve- 
 ment also, the City was required to, and did, con- 
 tribute a substantial amount. 
 
 In view of this situation it has always been con- 
 sidered a matter of great doubt whether the rail- 
 road constructed and maintained under these cir- 
 cumstances constituted a special franchise. In 
 1900, and the succeeding years, the local Board of 
 Tax Assessors, as they had theretofore done, as- 
 sessed this section of railroad for purposes of 
 taxation, and the State Board of Tax Commission- 
 ers, the defendants herein, also assumed to assess 
 it as a special franchise. 
 
 The claim of the relator, succinctly stated, is 
 and has been, that the assessment last mentioned 
 was illegal, because the State Board was without 
 jurisdiction, the railroad not constituting a spe- 
 cial franchise, that it was excessive, and that it 
 was unequal. 
 
 Certiorari proceedings for the years 1901 to 
 1908, inclusive, similar to the proceedings in this 
 case, were sued out by the relator, and after the 
 Return was filed, the cases were all referred to 
 Mr. James G. Graham, as Referee, to take testi- 
 mony, and report with his opinion thereon, and 
 the proceedings were all tried practically together 
 before Mr. Graham; a separate record, however, 
 being made in each case. As the testimony taken 
 before the Referee is printed without change, tin* 
 Court will understand that very much of the evi- 
 dence was otTered as to all of the years. 
 
 It was urged before the Referee, and before the 
 Special Term, that the franchise tax law did not 
 include steam surface railroad highway occupa- 
 tions. That question, having been passed upon 
 by the Court of >\ppeals in the ease of People ex 
 
6 
 
 rel The New York Central and Hudson River 
 Railroad Company vs. State Board of Tax Com- 
 missioners, as to crossings in the City of Buffalo, 
 the opinion being handed down October 17, 1911 
 (203 N. Y., 167), and the Act held applicable to 
 highways in existence before the railroad, is not 
 presented on this appeal, the relator deeming that 
 it has been disposed of. 
 
 Upon the trial before the Referee and the 
 Court, particular stress was laid by relator upon 
 the proposition that as the railroad ante-dated 
 the street it could not be designated a special 
 franchise. The Referee, following the opinion of 
 Mr. Justice Chester in the Buffalo franchise tax 
 case, held that it made no difference whether the 
 street was junior to the railroad or not, provided 
 only that at the time the assessment was laid it 
 was a public street (p. 725, fols. 2175-6). This 
 view the C^ourt of Appeals has overruled in the 
 Buffalo franchise tax case just cited, holding that 
 the junior highway occupation by a steam railroad 
 does not constitute a special franchise. 
 
 The learned Appellate Division sustains the 
 legality of the assessment on an entirely different 
 and novel ground, namely, that the relator, or its 
 lessor the New York and Harlem Railroad Com- 
 pany, is estopped from asserting that this avenue 
 was not an open public street at the time the rail- 
 road was l)uilt because its charter required the 
 City’s assent to its location on a then ])aper 
 street. A new species of taxable property is ac- 
 cordingly ranged under the franchise tax law, 
 namely, what may he termed a special franchise 
 hy anticipation. No authority is cited to sustain 
 this position, (p. 770i, fols. 2.308i to 2309n.) 
 
 A similar situation legally was ])rosented to the 
 Second De])artment of the A])])ellate Division in 
 Peo. ex ret L. 7. R. R. Co. vs. State Board of 
 
Tax Commissioners (133 N. Y. Supp. 348; Ad- 
 vance sheets No. 593; 148 App, Div. p. 751), where 
 the relator’s predecessor railroad company agreed 
 under legislative authority with the City of Brook- 
 lyn to locate its railroad along the central por- 
 tion of a projected street known as Atlantic 
 Avenue. Both the Special Term and the Appel- 
 late Division held, the latter unanimously, that 
 the location of such railroad along the central 
 portion of Atlantic Avenue, which was opened 
 under proceedings taken by the City immediately 
 after tlie agreement was made, did not constitute 
 a special franchise under the tax law, but that 
 the right of the relator to occupy Atlantic Ave- 
 nue is solely assessable by the local tax authori- 
 ties, the proposition which the relator has uiii- 
 fonnly asserted in the case at bar, its position 
 being fortified by the fact that Fourth (or Park) 
 Avenue was not opened and was not a public 
 street until some 20 years after the railroad occu- 
 pation. It is believed that the appeal of the Inter- 
 vener, the City of New York, in the Atlantic Ave- 
 nue case will be argued at about the same time 
 with the appeal in the case at bar. Our argument 
 that the State Board was without jurisdiction and 
 that its assessment is illegal is discussed under 
 the First Point of this l)rief. 
 
 On the question of the excessiveness of the as- 
 sessment the learned Referee held that the relator 
 had not made out a satisfactory case, principally 
 because it had not called exy)ert witnesses to tes- 
 tify as to the value of the intangible element in 
 the alleged special franchise (fols. 2210-2222). 
 In the Buffalo franchise tax cases the Referee 
 there, and the Court, held that the value of the 
 intangible element was not susceptible of f)roof l)y 
 opinion evidence, l)ecause invading the province 
 of the Court, and the Court of .\ppeals in th(> 
 
» 
 
 8 
 
 Buffalo ease last cited has sustained this view, 
 so that the lieferee is left in the position of crit- 
 icising the relator for its omission to produce evi- 
 dence which the Court of Appeals says is not com- 
 petent and cannot he admitted. 
 
 The learned Appellate Division affirms this 
 branch of the case on the ground that the net 
 earnings rule is inapplicable to this situation and 
 that wholly diverse and various considerations 
 may enter into the fixing of the assessment under 
 the circumstances here shown. This ruling prac- 
 tically deprives the relator of the power to review 
 the question of excessiveness. The finding of the 
 Tax Commissioners would have been just as in- 
 vulnerable if they had with no more arbitrariness 
 than that actually evidenced, fixed the valuation 
 of the intangible element at $50,000,000. or $500,- 
 000,000. instead of at about $5,000,000. 
 
 The unanimous affirmance restricts our discus- 
 sion under this head to such questions as are 
 raised by the findings {Peo. ex rel Brooklyn 
 Heights R. E. Co. vs. State Board of Tax Com- 
 inissioners, ifOf N. Y. Adv. Sheets Vol. 585 p. 92). 
 
 Following the uniform current of decisions on 
 the subject the learned Referee, however, did find 
 that the assessment was unequal in that the al- 
 leged special franchise had been assessed at full 
 value while other real estate in the same taxing 
 district, not special franchises, had been assessed 
 at 67% only of the value in the year 1900, and he 
 accordingly reduced the assessment to equalize 
 it as above stated. 
 
 The Referee was sustained in his findings in all 
 respects by the learned Specijfl Term, Mr. Jus- 
 tice Chester presiding and writing no o])inion. 
 The Appellate Division has affirmed this branch 
 of the case. All the findings found by the Keferee 
 
9 
 
 were found by the Court, and all the findings re- 
 fused by the Referee were refused by the Court. 
 
 The City of Xew York, iutervenor, appeals 
 from the affirmance of the final order, as we un- 
 derstand it, solely on the ground that it was error 
 to equalize the assessment because, as the City 
 of New York claims, the alleged special franchise 
 was worth a great deal more than the figure fixed 
 by the Tax Commissioners. There is, however, 
 » no finding made bj’ the Referee, or the Court, to 
 that effect. The Court of Appeals has passed on 
 this question in its decision handed down in People 
 ex rel the Hudson & Manhattan R. R. Co. vs. State 
 Board of Tax Commissioners (203 N. Y. 119, 132), 
 and has specifically held that in the absence of 
 any finding that the assessed valuation of the 
 relator’s property was less than its true value, 
 even when reduced so as to equalize with the pre- 
 vailing rate of assessment, it must be assumed 
 that the State Board assessed the relator’s prop- 
 erty at its full value. This would seem to dispose 
 of the City’s appeal in this case. 
 
 As the same legal questions and substantially 
 the same questions of fact, were involved in the 
 years 1901 to 1907, both inclusive, it is deemed 
 sufficient for the present to present the conten- 
 tions of the parties upon the record for the year 
 1900. 
 
 In the year 1908 the Tax Commissioners added 
 to the Park Avenue assessment amounts rei)re- 
 senting new items of property, namely, the south- 
 erly half of the bridge crossing the Harlem River 
 claimed to be a special franchise, and certain sub- 
 .surface riglits in the cross streets from 4;jth to 
 50th Streets east and west of Park Avenue, which 
 the (k)in[)any secured from the City of New York 
 under the statute for the purpose of carrying out 
 its extensive imy)rovements at the (Irand Clentral 
 
10 
 
 Terminal, now under construction. The same 
 questions tiiat are presenied in the 1900 record 
 are also presenied in tlie 1908 record, besides the 
 two other questions stated. A further dift'erence 
 which should be noted is that for the year 1900 
 the method, or lack of method, used by the State 
 Board of Tax Commissioners in assessing the al- 
 leged special franchise in Park Avenue was fully 
 brought out, the Commissioners appearing and 
 testifying as witnesses (fols. 388-429). For the 
 year 1908 the Court vacated the subpoenas which 
 the relator had served upon the defendant Tax 
 Commissioners (1908 record, fol. 1477), on the 
 ground that an amended return would contain all 
 the information that relator was entitled to get 
 as to the methods pursued in making the assess- 
 ment. An amended, or further. Return was filed, 
 and the same is printed in the 1908 record (fol. 
 151), but which relator contends, and the Referee 
 and Court below agree, contains no information 
 whatever for the Court, leaving the methods of 
 the Tax Commissioners in making this assessment 
 absolutely in the dark. 
 
 To avoid needless repetition, we have presented 
 in the brief for the 1908 case, only the discussion 
 upon questions which are peculiar to that ease, 
 or different from the record for 1900, and with a 
 view to promoting the convenience of the Court, 
 we have taken the liberty of binding the brief in 
 the 1908 case together with the present brief. 
 
 Further facts will be stated under the respec- 
 tive Points. 
 
11 
 
 FIRST POINT. 
 
 The State Board of Tax Commissioners 
 was, and is, without jurisdiction, because 
 the railroad of the Relator in Park Ave- 
 nue had been built, maintained and oper- 
 ated long prior to the coming into exis- 
 tence as a public street of the strip of land 
 on which it was so ,_construoted, main- 
 tained and operated, and the avenue when 
 opened was opened subject to the prior 
 rights of the railroad. 
 
 This point is raised in the petition for writ of 
 certiorari (p. 23, fol. 68) : 
 
 "‘Second. That said assessment is illegal 
 in that said State Board had no jurisdiction 
 or authority under said act, to make the same 
 for the reason that the line of railroad of said 
 The New York and Harlem Railroad Com- 
 pany between 42nd Street and the Harlem 
 River, in the Borough of Manhattan, City of 
 New York, is not constructed and operated 
 under or by virtue of any franchise, right 
 or peiTiiission to construct, maintain and 
 operate the same in, under, above, on or 
 through any street, highway or public place.” 
 
 and then follows in the j)etition a recital of the 
 corporate history of the Coni[)any, and of the 
 street; all of which was pi’oved in evi«lence with- 
 out disi)ute. The petition on this branch of the 
 case concludes with the following (fol. 86) : 
 
 ‘‘That the entire line of railroad of said 
 The New York and Harlem Railroad (Com- 
 pany as the same is now constructed, main- 
 
12 
 
 tained and operated from 42nd Street to tlie 
 Harlem River, in the City of New York, Bor- 
 ough of Manhattan, was constructed and is 
 now maintained and operated under and pur- 
 suant to the rights acquired under and by the 
 deeds, grants, agreements, ordinances and 
 legislative acts hereinbefore in this petition 
 mentioned, and said line of railroad of The 
 New York and Harlem Railroad Company 
 between 42nd Street and the Harlem River 
 in the City of New York, Borough of Man- 
 hattan, is not constructed, maintained and 
 operated under any franchise, right or per- 
 mission to construct, maintain and operate 
 the same in, under, above, on or through any 
 street, highway or public place.” 
 
 The New York and Harlem Railroad Company, 
 the relator’s lessor, was incorporated l)y Chapter 
 263 of the Laws of 1831 (fob 179), and to that act 
 and its amendments we must look for the original 
 grant of whatever rights or powers the company 
 secured, or subsequently exercised. The incor- 
 porators named in Section 1, are constituted a 
 liody politic and corporate under the name of the 
 New York and Harlem Rail-Road Company, with 
 power 
 
 “to construct a single or double rail-road or 
 way from any point on the north l)ounds of 
 Twenty-third street, to any point on the Har- 
 lem river, between the east bounds of tlie 
 Tliird avenue and the west bounds of the 
 Eighth avenue * * * to trans])ort, take and 
 carry property and persons upon the same, 
 by the iiower and force of steam, of animals 
 or of any mechanical or other power, or of 
 any combination of them which the said com- 
 pany may choose to em))loy; and by that 
 name, they and their snccessors shall l)e and 
 
13 
 
 they are hereby vested with the right and 
 privilege of constructing, erecting, building, 
 making and using a single or double railroad 
 or way for the purpose aforesaid, and for the 
 term of thirty years from the passage of this 
 act.” 
 
 Section 2 provides that the corporatioii sliall 
 forever cease, and that this act shall be null and 
 void if such corporation — 
 
 “shall not within six months from the pass- 
 age of this act locate the route of said rail- 
 road or way * * * and make a survey of 
 
 such location and file a map thereof in the 
 Register’s office of the city and county of 
 New York, and within two years from the 
 passage of this act commence, and within four 
 years from the passage of this act construct, 
 finish and put in operation the said single or 
 double railroad or ways; * * * no 
 
 such map shall be filed until the same shall 
 have been submitted to and approved by the 
 common council of the city of New York; 
 such api)robation shall be expressed by a 
 joint resolution of the said common council, 
 declaring their approbation of the ma[j, and 
 of the route of the said railroad indicated 
 therein.” 
 
 It will be observed that this ajjproval by the 
 common council was required wherever said road 
 within the bounds indicated might he located; that 
 is, whether upon one of the avenues shown on the 
 city map or over private property l)etween the 
 avenues, and crossing numerous streets running 
 east and west, shown on the city map, i)ut un- 
 ojiened and unused. 
 
 Section 4 provides that aftei’ the cai)ital stoek 
 shall have been subscribed the directors shall be 
 ele<'t<*d — 
 
14 
 
 “and tlie said Board of Directors shall have 
 power to appoint an engineer, and cause such 
 examinations and surveys for the said rail- 
 road to be made as may be necessary to the 
 selection by them of the most advantageous 
 line, course or way for the said way ; and the 
 said board of directors shall, after such ex- 
 aminations and surveys shall be made, select 
 and under their hands and seals, designate 
 tbe line, course or way, which they may deem 
 most advantageous for the said railroad, one 
 of which certificates shall be filed in the office 
 of the register of the city and county of New 
 York; which line, course or way, so selected 
 and certified, shall be deemed the line, course 
 or way on which the said corporation shall 
 construct, erect, build or make their single 
 or double railroad or ways as hereinafter 
 mentioned;” * 
 
 Section 8 provides among other things — 
 
 “The said corporations are hereby author- 
 ized, by their agents, surveyor, and engineers, 
 to enter upon such route, place or places, to 
 be designated as aforesaid by the said direc- 
 tors, as the line, course, road and way where- 
 on to construct their single or double railroad 
 or ways; and it shall be lawful for the said 
 corporation to enter upon and take posses- 
 sion of and use all such lands and real estate 
 as may be indispensable for the construction 
 and maintenance of their single or double 
 railroad or ways, and may also receive, hold 
 and take all such voluntary grants and dona- 
 tions of land and real estate as shall be made 
 to the said corporation, to aid in the construc- 
 tion, maintenance and accommodation of the 
 said single or double raili'oad or ways, pro- 
 vided that all lands or real estate thus en- 
 tered and taken possession of and used by 
 
15 
 
 said corporation, and which are not dona- 
 tions, shall be purchased by the said corpora- 
 tion, of the owner or owners of the same, at 
 a price to he mutually agreed upon between 
 them;” * * * 
 
 Then follows in case of disagreement the pro- 
 cedure in the nature of condemnation proceed- 
 ings to be taken before the Vice-Chancellor of the 
 First Circuit, providing with reference to the 
 order of confirmation — 
 
 “and when said order or decree shall be re- 
 corded in the office of the register of the city 
 and county of New York, the said corporation 
 shall be seized and possessed of the fee simple 
 of all such land or real estate, and may enter 
 upon, take and use the same for the purpose 
 of the said road.” 
 
 Section 10 provides as follows: 
 
 “The said corporation is herel)y authorized 
 to construct, erect, build, make and use a 
 single or double railroad or ways, of suitable 
 width and dimensions, to be determined by 
 the said corporation, on the line, course and 
 way selected or designated by them in man- 
 ner aforesaid, and shall have jjower to regu- 
 late the time and manner in which goods and 
 passengers shall be transported, taken and 
 carried on the same, and shall have power to 
 erect and maintain toll houses and such 
 other buildings for tlie accommodation of 
 their concerns as they may deem suitable for 
 their interests; the said corporation shall not 
 take any laiuls without the consent of the 
 owner or owners thereof, (‘xceeding forty feet 
 in width from east to west, and shall in case 
 of their locating the route of the said rail- 
 road in or along any j)ublic stre(>t or avenue 
 
16 
 
 now laid out on the map or plan of the city 
 of New York, leave sufficient space in the said 
 street or avenue on each side of the said rail- 
 road for a public highway for carriages, and 
 for a sidewalk for foot passengers.” 
 
 Section 11 is as follows: 
 
 “Whenever it shall be necessary for the 
 construction of their single or double rail- 
 road or way, to intersect or cross any stream 
 of water or water courses, or any road, street 
 or highway, it shall be lawful for the said 
 corporation, with the consent and approba- 
 tion of the mayor, aldermen and commonalty 
 of the city of New York to construct their 
 single or double railroad or ways across or 
 upon the same; provided that the corpora- 
 tion shall restore the stream or water course 
 or road, street or highway thus intersected, 
 to its former state, or in a sufficient manner 
 not to have impaired its usefulness, and shall 
 moreover erect and maintain sufficient fences 
 upon the line of the route of their single or 
 double railroad or ways.” 
 
 Section 16 provides in part: 
 
 “Nothing in this act shall be deemed to 
 authorize the said corporation to construct 
 or use their single or double railroad or way 
 across or along any of the streets or avenues 
 as designated on the map of the city of New 
 York, whether such streets or avenues shall 
 have been opened or not without the consent 
 of the mayor, aldermen and commonalty of 
 said city, who are hereby authorized to grant 
 permission to the said eor])oration to con- 
 struct their said railroad or way across or 
 along said streets or avenues, or prohibit 
 them from constructing the same, and after 
 the same shall be constructed to regulate the 
 
time and manner of using the same, and the 
 speed with which carriages shall’ be permit- 
 ted to move on the same or any part there 
 of;” * * * (Italics ours.) 
 
 It is evident that this requirement so far as it 
 concerned the unopened i)ortion of Fourth Ave- 
 nue was to obtain permission to occupy lands 
 along which a proposed street had been laid out 
 hut never opened so as to become an actual street. 
 Was such permission when obtained taken in con- 
 nection with the language of section 16, the grant 
 of a special franchise within the meaning of the 
 tax law? The learned Ai)])ellate Division says 
 that it was, holding in effect that it is wholly im- 
 material that the projected avenue was (iu this 
 section) wholly unopeiu'd and the soil thereof 
 l)rivately owned. 
 
 AVe say that this j^osition is diametrically o])- 
 posite to the decisions of this (’ourt hereinafter 
 notice<l. 
 
 Section 18 is: 
 
 “The legislature may at any time alter, 
 amend, modify or repeal this act.” 
 
 It will he seen that in order to comply with the 
 conditions of the legislative grant to the New 
 York and Harlem Railroad Company of the right 
 to build its railroad within the limits stated, in 
 the city of New York three things were necessary 
 to be done: 
 
 (1) The Directors were requin'd to have sur- 
 veys made and to formally adopt the route 
 selected. 
 
 (2) Such location of the route when made was 
 required to be approved by the Common Council, 
 
18 
 
 this without regard to the fact whether the road 
 was to be located ujjoii an unopened avenue or 
 between the avenues, and across numerous paper 
 streets running east and west. 
 
 (3) In case of the location of such railroad 
 upon an avenue or across streets shown on the 
 map of the city of New York, whether such ave- 
 nue or streets should be opened or not, the con- 
 sent of the municipal authorities was required. 
 
 It is next in order to inquire what steps the 
 New York and Harlem Railroad Company took to 
 comply with these conditions in its charter. 
 
 A survey of the route of said railroad was duly 
 made, locating the said railroad along the center 
 of Fourth Avenue, as laid down on the City map. 
 This map was entitled “Profile and map of the 
 Fourth Avenue as surveyed for the contemplated 
 Harlem Railroad. New York, August, 1831,” and 
 attached thereto was a resolution, as required by 
 the charter, of the Board of Directors that this 
 line of the route of their railroad be through the 
 center of the line of Fourth Avenue from the 
 north side of Twenty-third Street to the Harlem 
 River. Said resolution further provided that 
 said map, previous to the filing thereof, be pre- 
 sented to the Common Council of the City of New 
 York for approval, in pursuance of the require- 
 ments of said 'Act of incorporation. 
 
 (See Relator’s Exhil)it BBB of Decem- 
 ber 8, 1909, fob 1605; Appendix, p. 
 973.) 
 
 By resolution of the Common Council of the 
 City of New York, approved by the INIayor Octo- 
 ber 11, 1831, the said map was approved u])on 
 condition that neither said approval nor anything 
 therein contained should be construed into a con- 
 
19 
 
 sent to the said company to construct the rail- 
 road, but that said company would first obtain the 
 consent of the Mayor, Aldermen and Commonalty 
 of the City of New York before they commenced 
 the construction of said road. 
 
 (Relator’s Exhibit 9, fob 1623.) 
 
 The Court at Special Term found that this con- 
 sent did not constitute a special franchise (fol. 
 1821). 
 
 It will thus be seen that the different character 
 of the two municipal consents, required by the 
 Act of incorporation, was clearly recognized at 
 the outset. 
 
 Fourth Avenue, along the center line of which 
 the route of this railroad was located, at the time 
 thereof, was in this situation : It was shown upon 
 a map of the city, filed April 1, 1811, having been 
 laid out by Commissioners appointed in “An Act 
 relative to improvements touching the laying out 
 of streets and roads in the City of New York, and 
 for other purposes,” passed April 7, 1807, and 
 known as and being Chapter 115 of the Laws of 
 1807. 
 
 This avenue as thus laid out was 100 feet wide, 
 and extended from a point below Twenty-tliird * 
 Street in said City northerly to the Harlem River. 
 
 At that time the street had been legally opened 
 going northerly only so far as Thiify-eighth 
 Street. The portion of the avenue with wliieli 
 this proceeding is concerned from Forty-fifth 
 Street north to the Harlem River was merely a 
 paper street. 
 
 The Aet incorporating the New York and Har- 
 lem Railroad Company, however, required the 
 consent of the municipal authorities to the occu- 
 pation of Fourth Avenue by the railroad over the 
 
20 
 
 unopened portion as well as over the opened por- 
 tions thereof, and steps were accordingly taken 
 by the Railroad Company to secure this consent. 
 
 By ordinance of the Common Council of the 
 City of New York passed by the Board of Aider- 
 men on the 16th day of December, by the Board of 
 Assistants on the 19th day of December and ap- 
 j)roved by the Mayor on the 22nd day of Decem- 
 lier, 1831, the New York and Harlem Railroad 
 Company was permitted to construct and lay 
 down in pursuance of their said act of incorpora- 
 liou a double or single track or railroad or rail- 
 way along the Fourth Avenue from Twenty-third 
 Street to the Harlem River in conformity with 
 said map filed in the said register’s office, pro- 
 vided that the width of said double railroad or 
 way should not exceed 24 feet, and subject to 
 other conditions, all of which said New York and 
 Harlem Railroad Company by Articles of Agree- 
 ment dated January 9, 1832, duly covenanted and 
 engaged to stand, abide by and perform (fol. 186; 
 Appendix p. 775, fol. 2323). 
 
 The Court at Special Term ruled that this ordi- 
 nance did not constitute the grant of a special 
 franchise (fol. 1822). 
 
 Upon the execution and filing of the said Arti- 
 cles of Agreement last above mentioned the New 
 York and Harlem Railroad Company made final 
 compliance with its charter conditions, and there- 
 upon confirmed in itself the general right already 
 conditionally secured from the Legislature to 
 locate and build, maintain and operate, its rail- 
 road, the center line of the location of which 
 coincided with the center line of the partly opened 
 and partly unopened street known as Fourth 
 Avenue and laid down on the city mai). That the 
 right thus secured came from the State and not 
 from the City of New York is abundantly sus- 
 taino<1 by the autboritios. 
 
21 
 
 See 
 
 People vs. Kerr, 27 X. Y., 188, 209 to 214 ; 
 
 Wilcox vs. McClellan, 185 N. Y., at p. 16; 
 
 Citv of New York vs. Bryan, 196 N. Y., 
 158-63 ; 
 
 City of New York vs. N. Y. Mut. Gas. L. 
 Co., 135 App. Div., 260; 
 
 N. Y. C. ic II. R. R. R. Co. vs. City of 
 New York, et al., 202 N. Y., 212. 
 
 In view of the foregoing decisions, it is difficult 
 to understand the expression used in the opinion 
 of the Appellate Division (fol. 2308n), where it 
 is said of the relator: 
 
 “It is therefore occupying the street by 
 virtue of the consent of the city and its 
 rights therein are taxable as a special fran- 
 chise.” 
 
 Before entering upon the land over which its 
 railroad route was located, it still remained for 
 the New York and Uarlem Railroad Company to 
 secure from the owners of the soil the necessary 
 title for its roadbed. The action taken in this 
 regard and the legal ellect thereof we shall dis- 
 cuss a little later under this point. 
 
 The charter of the New York and llarlein Rail- 
 road Company was repeatedly amended by sul)se- 
 quent enactments of the Legislature. The acts 
 deemed material were offered in evidence (fols. 
 180-182). The amendments with which we are 
 concerned here were made by 
 
 Chapter 242 of the Laws of 1840; 
 
 Chaijter 333 of the Laws of 1845; 
 
 Chapter 195 of the l^aws of 184(5; 
 
 Chapter 200 of the Laws of 1846; 
 
 (Chapter 143 of the Laws of 1848; 
 
 Chapter 207 of the Laws of 1857; 
 
 Cha[)ter 880 of the Laws of 1867; 
 
 Chapter 919 of the Laws of 186tt. 
 
22 
 
 A reference to these acts will show that the gen- 
 eral franchises of the railroad were enlarged so as 
 to authorize an extension of its line first, into and 
 through the County of Westchester and to the 
 Adllage of White Plains, and subsequently to its 
 present terminus at Chatham, in the County of 
 Columbia. 
 
 The New York & New Haven Railroad Com- 
 pany, now known as The New York, New Haven 
 and Hartford Railroad Company, was specially 
 authorized to connect its tracks with fhe tracks of 
 the New York and Harlem Railroad Company at 
 Williamsbridge, and thus to gain an entrance into 
 the City of New York. The extension of the New 
 York, New Haven and Hartford Railroad as au- 
 thorized within the State of New York was con- 
 structed and said trackage agreement with the 
 New York and Harlem Railroad Company, dated 
 March 17, 1848, \Vas entered into, and has since 
 remained, and is now, in force (fol.^294; Appendix 
 p. 876, fob 2626). 
 
 This was, perhaps, the most significant of the 
 early amendments made by the Legislature, in 
 that it made the New York and Harlem Railroad 
 the western terminus of a trunk line railroad 
 traversing New England, and connecting the 
 cities of Boston and New York. Beginning with 
 a short line constructed wholly within the limits 
 of the City of New York, the railroad rapidly out- 
 grew its infant characteristics and became the 
 ordinary steam surface railroad extending over 
 several counties of the State and forming connec- 
 tions at Chatham with the Boston & Albany Rail- 
 road, thereby furnishing a direct route between 
 New York and All)any, and furnishing a western 
 outlet of the New England railroad systems. 
 
 Another series of amending acts are ])roperly 
 noticed in this connection (fols. 181-182). 
 
23 
 
 Under Chapter 702 of the Laws of 1872, entitled 
 ‘ ‘ An act to improve and regulate the use of Fourth 
 Avenue in the City of New York,” passed May 
 14, 1872, the Legislature authorized and com- 
 manded an extensive system of railroad and street 
 improvements under the supervision of a board 
 appointed by the Act, and required the expense 
 of the improvement to be largely shared by the 
 City of New York. 
 
 In brief, this Act changed the grade of the rail- 
 road, authorized additional main tracks, required 
 the elimination of all grade crossings, and pro- 
 vided for a physical structure whereby the rail- 
 road would be carried first, in a depressed cut, 
 then through a tunnel to about 9(ith Street; thence 
 upon a stone viaduct structure with parapet walls 
 to about 115th Street, and then through an open 
 cut with perpendicular retaining walls to the Har- 
 lem River. The result of this improvement was 
 to carry the cross streets over the railroad tracks 
 from 45th to 9Gth Streets, to provide a hi-sected 
 avenue for the portion where the tunnel was con- 
 structed so that there were, and are, roadways 
 on each side of a central strip which contains open- 
 ings to the tunnel below, which said central strip 
 is also ornamented by grass plots and shrub- 
 bery. North of 100th Street the cross streets 
 were, and are, carried by archways under the 
 stone viaduct structure. North of 115th Street 
 the original open cut railroad structure was con- 
 siderably below the grade of the avenue, and the 
 cross streets were carried over by bridges. The 
 total expense of this improvement was $0,482,- 
 570.80. The City reimbursed the Railroad Com- 
 pany under the terms of this Act lo the extent of 
 $2.0*44,105.81 (fob 201-202). 
 
 In connection with the irnprovenienl last above 
 mentioned, other extensive changes in the rail- 
 
24 
 
 roads entering Manhattan Island were made. The 
 Hudson River Railroad extending from Rens- 
 selaer opposiie the City of Albany to (or be- 
 low) St. John’s Park in the City of New York, 
 had been in 1869 consolidated with the New 
 York Central Railroad extending from Albany 
 to Buffalo, the steam line of The Harlem 
 Railroad from 42nd Street north was leased 
 in 1873 to the new consolidated corporation 
 for a long term of years, and the Spuyten 
 Duyvil & Port Morris Railroad, organized un- 
 der a special act, was built within the limits of 
 what is now the Borough of The Bronx, City of 
 New York, as a link connecting at Spuyten Duyvil 
 between the railroad along the east bank of the 
 Hudson River and the Harlem Railroad. Passen- 
 ger and freight carrying functions were differ- 
 entiated so that the portion of the steam line of 
 the Harlem Railroad lying south of the junction 
 at Mott Haven with the Spuyten Duyvil and Port 
 Morris Railroad connecting link, was used sub- 
 stantially only for passenger traffic, and that por- 
 tion of the Hudson River Railroad extending 
 along the west side of the City, south of Simyten 
 Duyvil, was and is used substantially, only for 
 the transportation of freight. A large passen- 
 ger terminal was erected at 42nd Street; Fourth 
 Avenue between 42nd Street and 45th Street hav- 
 ing been closed by law and the land deeded to the 
 Railroad Company. The lower section of the 
 original Harlem Railroad operated by other than 
 steam power lying in Fourth Avenue below 42nd 
 Street was extended northerly through Madison 
 Avenue, and now forms a line of surface railroad 
 operated by electricity, and by lease forms a part 
 of the system of street railroads operated by the 
 ]\fetro]mlitan Street Railroad (''oTni)any (si’i(*(* 
 
25 
 
 foreclosure oi)erated by tlie New York Eailways 
 Company). 
 
 The corporate life of the New York and Harlem 
 Railroad Company of 30 years having been origi- 
 nally extended by statute, Chapter 387 of the 
 Laws of 1859, for an additional term of 30 years, 
 under Chapter 240 of the Laws of 1874, by certifi- 
 cate duly executed by the stockholders of said 
 company, and filed December 28th, 1874, in the 
 office of the Secretary of State, was further ex- 
 tended for the term of 500 years from April 16 
 1889 (page 80, fob 239). 
 
 As recently held by the Court of Appeals, this 
 extension applied only to the corporate life of 
 the Harlem Company, not to its general franchise 
 to operate a railroad between its termini, viz: 
 Chatham and New York City. The latter is un- 
 limited in time, conditioned only upon user. 
 
 See 
 
 N. Y. Central & H. R. R. R. Co. v. The 
 City of New York, 202 N. Y., 212. 
 
 The Legislature again exercised its reserved 
 power to alter and amend the charter of the New 
 York and Harlem Railroad Company by further 
 acts imposing extensive street improvements. 
 
 The enterprise undertaken by the Federal Gov- 
 ernment, known as the Harlem Ship Canal, re- 
 quired for its successful development the raising 
 of the drawbridges crossing the same, so that 
 craft of slight clearance could be navigated 
 through said canal without necessitating the 
 opening of said drawbridges. 
 
 Fnder Chapter 907 of the Acts of Congress of 
 the year 1890 (fob 182), the bridges crossing the 
 Harlem River, inclnding the railroad bridge which 
 connected the railroad in Fourth .\venue with 
 
26 
 
 the portion thereof in the Borough of The 
 Bronx were required lo Oe elevated so as tio 
 atiord a clearance of 24 feet above the level 
 of mean high tides as soon as the neces- 
 sary State legislation could be secured. While 
 this legislation was pending, the property 
 owners ami others in Harlem, intervened, and 
 secured amendments to pending bills which 
 eventuated in Chapter 339 of the Laws of 
 1892, entitled “An Act to regulate, improve and 
 enlarge Park Avenue above 106th Street in the 
 City of New York.” This act was further amend- 
 ed by Chapter 548 of the Laws of 1894, Chapter 
 594 of the Laws of 1896 and Chapter 613 of the 
 Laws of 1898. 
 
 This legislation, comprehensively stated, com- 
 manded the destruction of the railroad structure 
 in Park Avenue from the south line of 111th Street 
 to a point near 133rd Street, consisting of the 
 stone viaduct structure from 111th Street to 115th 
 Street, and the depressed cut structure with per- 
 pendicular retaining walls from 115th Street to 
 a point near 133rd Street, and substituted in place 
 thereof a steel viaduct structure, putting the base 
 of rail some 25 feet, more or less, above the grade 
 of Park Avenue, requiring the removal of the old 
 viaduct structure and the tilling up of the de- 
 pressed cut, and the grading and paving of Park 
 Avenue in the space formerly occupied by tlie 
 railroad structures, with the result of making 
 Park Avenue from 111th Street north traversable 
 at all points except between 125th and 126th 
 Streets, where the station is located, and substi- 
 tuting one street 140 feet in width where formerly 
 there had been two narrow streets on each side 
 of the railroad structure. Trains have been oper- 
 ated on the new structure since February 16, 1897. 
 The expense of said improvement, which was exe- 
 
27 
 
 cuted by a public board appointed by the Mayor 
 of the City of New York under the terms of said 
 Chapter 339 of the Laws of 1892, was the sum of 
 $3,221,829.20, of which amount, as required by 
 said above-mentioned acts, the City of New Y’^ork 
 reimbursed the railroad company to the extent of 
 $773,531.95 (fob 293). 
 
 See Tocci vs. The Mayor, 73 Hun, 46. 
 
 This was a taxpayer’s action to restrain the 
 City officials from paying the Railroad Compan- 
 ies the sums above mentioned for the second im- 
 provement of Park Avenue. In affirming ah 
 order denying the plaintiff’s motion for an in- 
 junction pendente lite, Van Brunt, P. J., says, j). 
 51 : 
 
 “It is entirely immaterial in the consid- 
 eration of this question whether the railroad 
 company owned the fee of the land which they 
 occupied or not. For all practical purposes 
 they were its absolute owners, and entitled 
 to its absolute control and exclusive use for 
 the purposes of their railroads. It was for 
 the abandonment of these rights, and the ex- 
 pense of other constructions in their stead, 
 that the city was authorized to make the 
 payments provided for by the act.” 
 
 Departing somewhat from the chronological or- 
 der we have completed our review of the statutes 
 which have been passed modifying the charter of 
 the New York and Harlem Railroad Comi)any, 
 and requiring changes in the physical structure 
 of the railroad. Going back now to the situation 
 as it existed in 1832, and after the Railroad Com- 
 pany had filed its location map with the consent 
 of the Common Council, and had entered into the 
 agreement of January 9th, 1832, with the City, 
 it remained for it to acfpiire title for its railroad 
 
28 
 
 right of way in the unopened portions of Fourth 
 Avenue. Counsel for the Intervener, as well as 
 for the Relator, introduced a very large number 
 of exhibits tending to throw light on the title 
 situation in Park, or Fourth, Avenue, over that 
 portion thereof occupied by Relator’s railroad, 
 and which is claimed to constitute a special fran- 
 chise. In the following review of the title situa- 
 tion, which is of course confined to that segment 
 of Fourth Avenue with which this proceeding is 
 concerned, we shall refer to documents offered on 
 l)oth sides. 
 
 Under the Dongan and Montgomerie charters, 
 received in evidence (fols. 173-4), the Mayor, Al- 
 dermen and Commonalty of the City of New York 
 received a grant of land on Manhattan Island 
 from the English Crown, known as the “Common 
 Lands.” These originally extended from a point 
 not far north from the present 42nd Street to a 
 point substantially co-incident with the present 
 84th Street; north of that point were the Common 
 Lands of the old Village of Harlem. 
 
 After the close of the Revolutionary War it was 
 deemed desirable that the City should utilize this 
 tract, not for its original purpose, which had be- 
 come obsolete, but that the City should realize 
 from the sale of these lands to private purchas- 
 ers or lessees. Accordingly it appears that the 
 City Surveyor surveyed this plot, and prepared a 
 map thereof, known as the Goerck IMap, which was 
 received in evidence (p. 429, fob 1286, and rei)ro- 
 duced in the Appendix, p. 974, Defendants’ Ex- 
 hilut 77). In dotted lines the respective centers 
 of the present numbered cross streets are deline- 
 ated. Two paper streets were laid out on this 
 map, kjiown as Middle Road and East Road; 
 Middle Road l)eing nearly co-incident with the 
 pi’esent Fiftli Avenue, and East Road lying within 
 
29 
 
 the limits of wliat was subsequent!)’ Fourth 
 Avenue. It appears that the old City of New 
 York sold to a number of purchasers parcels of 
 land as shown, and nmnbered on this map. As 
 appears from extracts of the minutes of the meet- 
 ings of the Coimnon Council (in evidence pp. 
 417-9, fols. 1249-57) some of these plots were 
 sold and others leased. There is no evidence, how- 
 ever, that East Road was ever legally opened, 
 or that it was ever a traveled highway, or any 
 more than a paper street, a circumstance adverted 
 to by the Referee in his opinion (fob 2131). 
 
 In the opinion of the xVppellate Division it is 
 said (at folio 2.309k) : 
 
 “The evidence indicates that parts of the 
 street were used more or less for public 
 travel, before the railroad came, but mani- 
 festly the greater part had not been so used. ’ ’ 
 
 There is not the slightest evidence that any 
 portion of Fourth Avenue north of the south line 
 of 45th Street had been used as a public street, or 
 for highway purposes of any kind, prior to the 
 railroad occupation. It is further said in the Ap- 
 l)ellate Division oi)inion (fob 2310k): 
 
 “The making and filing of the map [show- 
 ing East Road, etc., on the Common Lands] 
 and selling of the Lots according to it, bound- 
 ed on the road, dedicated the road as a 
 I>ublic highway, so that as to the unused 
 lauds the city owned them in its private 
 capacity but subject to the use of East Road 
 by the juiblic as a highway. As to the sold 
 lots it owned the fee of the street fronting 
 them subject to use as a public street {Gra- 
 hfim vs. Stern, 108 N. V., 517).” 
 
 The decision in the case cited had no relation to 
 the so-called East Road. It had to do only with 
 
30 
 
 the title to certain cross streets as shown on the 
 Goerck map which were not coincident with the 
 same cross streets as laid out on the map filed in 
 1811. There was an overlapping of side lines. 
 The City subsecpiently arranged with the owners 
 to rectify this situation by an exchange of gores. 
 Tile ruling in Gruliam vs. Stem, was that the 
 City retained title to the beds of the streets con- 
 tiguous to the lots sold (contrary to the usual 
 rule) and the dispute between the parties to the 
 suit was resolved accordingly. It is no authority 
 for the proposition that East Road became a 
 public street with all its attributes prior to the 
 entry of the New York and Harlem Railroad 
 Company. 
 
 In Leivis vs. N. Y. & Harlem R. R. Co. et al 
 (162 N. Y., 202), it appeared that the portion of 
 Park Avenue with the abutting lots involved in the 
 ease, extending lietween 106th and 115th streets, 
 had been surveyed and mapped by the owner, Ben- 
 son, the map filed in the Register’s office, and deed 
 of cession of the land comprising the bed of Park 
 or Fourth Avenue, delivered to and accepted and 
 recorded by the Mayer, etc., of New York, and the 
 abutting lots sold to the plaintiff’s predecessor in 
 title all prior to the entry of the New York and 
 Harlem Railroad Company. This Court, however, 
 held that while Benson’s grantees of the abutting 
 lots got an easement of passage, the street had no 
 existence as such until the opening proceedings 
 taken in 1850 were consummated. Vaxx, J., says 
 at p. 219 : 
 
 “The avenue was not opened and built 
 upon, as such, l)ut was a street on paper 
 only.’’ * * * 
 
 “There is no evidence as to the character 
 of the original entry into tlie street l)y the 
 Harlem Com])any or the nature of its claim 
 
31 
 
 when or after entering, except as it may be 
 inferred from the facts above mentioned 
 and the subsequent occupation and use for 
 railroad purposes of a portion of the ave- 
 nue, which was a street in posse only and did 
 not become a street in esse until twenty 
 years later.” 
 
 The Lewis case further decided that the Rail- 
 road Company entered this portion of Park Ave- 
 nue under the same license from the City whereby 
 it entered oji the section of Park Avenue running 
 through the Common Lands. The trial court 
 ruled accordingly that such license did not con- 
 stitute a special franchise within the meaning of 
 the tax law (fol. 1824). 
 
 Pursuant to Chapter 115 of the Laws of 1807 
 (fol. 171) Commissioners were api)ointed to make 
 a survey and map of the Island of Manhattan, 
 including those portions north of the then limit 
 of settlement, which was somewhere north of 
 Canal Street. The Commissioners completed 
 their task, and the map was filed as required 
 about April 1, 1811 (fol. 179). The present street 
 system of the Borough of ]\Ianhattan, City of New 
 York, was determined by this map. Fourth Ave- 
 nue was delineated thereon, and as already stated 
 the old East Road as shown on the Goerck sur- 
 vey was substantially included within the limits 
 of Fourth Avenue (the lines of the two surveys 
 not harmonizing entirely), which was laid out 100 
 feet in width, whereas East Road was laid out 
 00 feet in width. Fourth Avenue extended clear 
 through to the Harlem River, while East Road 
 naturally ended with the then northerly line of 
 the City of New York near 84th Street. 
 
 There is not the slightest question that the land 
 comprising the bed of Fourth Avenue from 4r)th 
 
Street to 84tli Street was owned by the Mayor, 
 Aldermen and Coimnonaity of the City of New 
 York. 
 
 See Graham vs. Stern, 168 N. Y., 517. 
 
 From 81th Street to a point between 91st and 
 92nd Streets, and for a considerable distance east 
 and west thereof lay a tract of land known origi- 
 nally as the “Harlem Commons.” This tract 
 came into possession, prior to the organization 
 of the New York and Harlem Railroad Company, 
 of one Dudley Selden (p. 132, fob 1296; printed 
 in Appendix p. 977). From 91th Street north to 
 the Harlem River, Fourth Avenue was laid out 
 over various tracts of farm lands belonging to 
 private parties ; in some instances, as we shall see, 
 the tracts had been mapped and plotted with ref- 
 erence to the City map and deeds dedicating the 
 land comprising the bed of Fourth Avenue as 
 shown on the City map had been delivered to the 
 City. We shall examine these matters more in 
 detail hereafter. 
 
 We will take up now in order the effort which 
 the New York and Harlem Railroad Company 
 made to acquire the title to the unopened por- 
 tions of Fourth Avenue for the purpose of its 
 railroad, confining our examination to that por- 
 tion of Fourth Avenue involved in the present 
 proceeding. By reason of the complication of the 
 title situation, as shown by the large number of 
 deeds and maps that were offered in evidence by 
 both sides, it was deemed advisable to assemble 
 all of the muniments of title received in evidence, 
 reducing the scales employed in the various ma])S 
 to a uniform scale, and present with as much ac- 
 curacy as possible this title situation in a single 
 exhibit. Mr. Haviland, an engineer in the em- 
 ploy of the Relator, completed this task, and his 
 work is embodied in a series of ma])S received in 
 
evidence and marked “Exhibit AAA” (p. 534, 
 fob 1601, reproduced in the Appendix p. 972). 
 The original colors in these maps have been re- 
 produced by lithography. The maps also reflect 
 the damage map in the condemnation proceeding 
 taken by the City in 1850 to open Park Avenue, 
 containing notations showing the various convey- 
 ances or other muniments of title. From the south 
 line of 45th Street to the then south line of the 
 lands of the corporation of Xew York, namely 
 the Common Lands, which was about 50 feet 
 north of 4Sth Street, the bed of Fourth Avenue 
 was owned by Ahny Buchanan and others, and 
 the Railroad Company acquired title thereto by 
 a condemnation ]iroceeding (i)arcel 2nd), and 
 paid a substantial award for such title (fob 218). 
 
 There was evidently some doubt in tlie minds 
 of the projectors of the New York and Harlem 
 Railroad as to whether the agreement made with 
 the City dated January 9, 1832, could be regarded 
 as the permission of the Mayor, Aldermen and 
 Commonalty of tlie City of New York in its ca- 
 pacity as a private corporation to occupy lands, 
 tlie title to which was vested in the City of New 
 York in such private capacity. Accordingly a ))e- 
 tition was addressed to the Common Council (p. 
 346, fob 1037) by the oflicers of the New York 
 and Harlem Railroad Company, in which they 
 prayed that the Common Council would author- 
 ize them to take possession of the ground owned 
 by the Common Council, over which they had 
 laid out the line of their railroad, and to proceed 
 with the construction of their road. Pursuant to 
 this request by ordinance approved by the May- 
 or February 1, 1832 fp. 348, fob 1043), it was 
 
 “ Itpsolvrrl , That the New York and Har- 
 lem Railroad Company be, and are hereby 
 
34 
 
 antliorized, to take possession of the ground 
 owned liy the Common Council, over wliicli 
 the line of said Railroad is ordered to be con- 
 structed, and that they he permitted to use 
 the same during the continuance of the pres- 
 ent charter, for the purpose of a railroad, and 
 that only; and when they cease so to use it, 
 it shall revert to the Corporation; provided 
 always, that said land shall be so used as not 
 to interfere with the use of the cross streets, 
 and on condition, however, that if the said 
 Corporation shall not commence said rail- 
 road, and complete the same within the time 
 limited by their charter, then the privilege 
 hereby granted shall cease and be void.” 
 
 This was the so-called license considered by 
 this Court in the Leiris case (162 N. Y. 202). 
 
 The Court ruled (as already noted) that this 
 consent did not constitute the grant of a special 
 franchise, but was merely a permission of the 
 City to occupy lands owned by it in its private 
 capacity (fob 1824). 
 
 The learned Appellate Division says (fob 
 2310m) : 
 
 ‘‘Aside from the consent of the local au- 
 thorities, it [the railroad company] was a 
 trespasser in the avenue. As the relator’s 
 right in the street came from the consent and 
 permission of the City, the lajise of time docs 
 not create an adverse use which prejudices 
 or destroys the City’s rights. The Comi)any 
 held all the while under the City” 
 
 We have already i)ointed out that the City of 
 itself had no right to devote one of its public 
 streets to railroad i)uri)oses — that right could 
 alone proceed from the State. So far as the ront(‘ 
 
of the railroad lay over property privately owned 
 by the City it had the same right to grant occu- 
 pation to tlie railroad as any other private owner 
 would have. As to portions of the avenue, title 
 to which was not vested in the City in its private 
 capacity, the railroad company, without the City’s 
 consent, would have been not a trespasser but it 
 would not have complied with one of the condi- 
 tions of its charter. Of course, as to lauds owned 
 by private iiarties it would have been a trespasser 
 if it had entered without their consent, whether 
 or not the City had consented. 
 
 By reference to the Haviland map. Relator’s 
 Exhibit AAA (Appendix pp. 964-965) and as al- 
 ready stated it will be observed that a tract of 
 land originally the Harlem Commons, extending 
 from about the center line of 84th Street to about 
 the center of 91st Street as laid out on the City 
 map, had been vested in one Dudley Selden prior 
 to the incorporation of the New York and Harlem 
 Railroad Company. Selden had caused his tract 
 to be surveyed into lots with reference to the City 
 map and had sold off nearly all of the lots abut- 
 ting on Fourth Avenue within the limits of his 
 tract. Many of these deeds conveyed with the 
 lots all right, title and interest of Selden in the 
 bed of Park Avenue to the center line thereof 
 opposite the resi)ective lots. In other eases Sel- 
 den conveyed the lots by reference to the numb(!rs 
 of a map filed in the Register’s office, and did not 
 in terms convey his title to the bed of h^ourth 
 Avenue to the center line thereof opf)osite such 
 lots. 
 
 It will be noted on the Haviland map that the 
 attempt is made to indicate the title situation by 
 coloring. Parcels shaded in red were conveyed 
 prior to Selden ’s tlced to the New York and Har- 
 lem Railroad Company hereinafter mentioned. 
 
36 
 
 Parcels shaded in green were conveyed by deeds 
 dated subsequent to the date of the deed from 
 8elden to the New York and Harlem Railroad 
 Company. Wherever in the deeds dated prior to 
 the deed to the Railroad Company Selden con- 
 veyed his title in the bed of Fourth Avenue, the 
 central 24-foot strip subsequently conveyed to 
 the New York and Harlem Railroad Company is 
 left without coloring; wherever in the deeds dated 
 prior to the deed to the New York and Harlem 
 Railroad Company there is no conveyance in ex- 
 ])ress words of Selden ’s title to the bed of Fourth 
 Avenue, and also wherever deeds were granted 
 subsequent to the deed to the New York and Har- 
 lem Railroad Company, or deeds were obtained 
 by the New York and Harlem Railroad Company 
 from Selden ’s grantees, the central 24-foot strip 
 is colored yellow. 
 
 On January 18, 1832, Selden conveyed to the 
 New York and Harlem Railroad Company a strip 
 of land 24 feet in width the center line of which 
 was coincident with the center line of Fourth 
 Avenue as laid down on the city map from 84th 
 Street to 91st Street, together with the right to 
 slope embankments and excavations sufficient to 
 support the work Init not to exceed the then width 
 of the avenue, 100 feet (fols. 62, 197). 
 
 The officers of the Railroad Company being 
 aware, to some extent, of the title situation, in the 
 Selden tract obtained deeds from some of Sel- 
 den ’s grantees of the stri]^ of land 12 feet in width 
 comprising that half of the railroad road-bed on 
 the side nearest their lots; that is to say, deeds 
 were obtained from Benjamin iMcCready dated 
 January 18, 1832, David Graham, William AVeed 
 and Frederick AYeed, dated February 23, 1832 
 (fols. 187-189; 199-20.’5). It therefore remains as 
 
an obvious conclusion that the Eailroad Company 
 did not acquire title to the entire stretch of road- 
 bed between 84th and hist Streets from the then 
 owners. 
 
 Beginning at 91st Street the Eailroad Company 
 got a deed (fols. 189, 207) from Matilda Flanagan 
 dated January 18, 1832, of a small portion of the 
 right of way opposite the plot at the northwest 
 corner of 91st Street and Fourth xVvenue as shown 
 on the Haviland map. From 91st Street to a 
 point about midway between 93rd and 94th 
 Streets there is a gap in the continuity of title. 
 If the company obtained a deed to such property 
 it was not found in the company’s archives and 
 was not introduced in evidence. 
 
 From a point about midway between 93rd and 
 94th Streets to a point coincident with the north- 
 erly line of 97th Street as laid out on the city map 
 the land in question was vested in one Archibald 
 Watt, who granted the 24-foot strip with the right 
 to slope embankments and excavations (fols. 190, 
 210), this form of deed being sul)stantially the 
 same in all the grants to the New York and Har- 
 lem Eailroad Company. 
 
 From the north line of 97th Street to a point 
 just north of the south line of lOGth Street ]\rar- 
 garet McCown was the owner of the farm or tract 
 of land I)etween the limits stated including the 
 bcfl of Fourth Avenue, ami conveyed the 24-foot 
 strip with slope rights to Hie New York ami Har- 
 lem Ttailroad Compajiy by deed dated January 
 18, 18.32 (fols. 191, 211). The legal effect of this 
 deerl was considered by the Court of Afipeals in 
 tbe case of Covaherr vs. The N. Y. Covtral rnid 
 Jfiifison //. If. Co. (loG N. Y., 474), which case 
 will be hereafter examined. 
 
 From the northerly limits of the McOown tract 
 to about tbe eenter fif 107th Street, a distance of 
 
38 
 
 one block as shown on the city map, the space was 
 occupied by what was known as the Harlem Pond. 
 AVhether or not the McGown deed covered any 
 part of the bed of this pond is uncertain. No 
 muniment of title directly conveying the bed of 
 this pond has been found in the archives of the 
 company or introduced in evidence. 
 
 From the northerly shore of the Harlem Pond, 
 a point nearly coincident with the center line of 
 107th Street, to a point in the center of the Old 
 Koad — now extinct — which crossed Fourth Ave- 
 nue at a point just north of 115th Street, as shown 
 on the city map, the original tract or farm owner 
 was one Benjamin L. Benson. It appears that 
 Benson had his tract surveyed into lots with ref- 
 erence to the avenues and streets shown on the 
 city map, and delivered to the city a deed of ces- 
 sion of the bed of Fourth Avenue then 100 feet 
 wide, together with the beds of other streets and 
 avenues shown on the city map intersecting his 
 tract, in trust for street ]mrposes, which deed 
 dated November 19, 1825, was duly recorded in 
 the Eegister’s office, Lilier 196 of Conveyances, 
 page 261, December 6, 1825, and the deed was 
 received in evidence (fob 1046) and is set forth 
 in full on the record (p. 349, fob 1047). 
 
 AVhen, therefore, Benson delivered to the New 
 York and Harlem Eailroad Company his deed of 
 the 24-foot strip through the tract which he had 
 originally owned (fols. 191, 213) he had parted 
 with title to the lands purporting to ])e conveyed. 
 That he still had an interest, by reason of the 
 reservation contained in the deed to the city, to 
 convey to the New York and Harlem Eailroad 
 Company is found by the Court of Ap])eals in the 
 case of Lncis vs. The X. I^. ffi Tlnrlem R. R. Co. 
 (162 N. Y.. 202), Judge A'nim spying at p. 219: 
 
39 
 
 “Benson had conveyed the entire avenue 
 to the cit5’ for street purposes reserving cer- 
 tain rights, and after thus conveying to the 
 city had assumed to convey said strip to the 
 Harlem Company exclusively for railroad 
 purposes, but the conveyance was effective 
 only as to his reserved rights.” 
 
 The Lewis ease is further authority for the 
 proposition that the railroad company entered 
 into possession of that part of Fourth Avenue 
 comprised within the Benson tract under the au- 
 thority of the city hereinabove quoted contained 
 in the ordinance approved February 1, 1832. 
 Judge Vann says at pp. 220-221 : 
 
 “The entry by the Harlem Company was 
 by the express permission of the city, under a 
 resolution which recited that the land entered 
 upon was at the time owned by the city.” 
 
 It seems appropriate here to point out that the 
 fact of ownership of the common lands by the city 
 as being the occasion for securing the authority 
 embodied in the resolution ai)proved February 1, 
 1832, was not before the Court of Appeals in the 
 Lewis case, nor was the point presented to the 
 Court that as the right to occupy Fourth Avenue, 
 whether opened or unopened, was conferred upon 
 the New York and Harlem Railroad Company by 
 the Legislature and not by the city, the city had 
 no power or authority to give any rights in the 
 streets except as specifically conferred by the act 
 incorporating the New York anrl Harlem Rail- 
 road Company, and that, therefore, while the au- 
 thority of the city in the ordinance approved Feb- 
 ruary 1, 1832, was properly given as to the com- 
 mon lands which it owned in a private capacity, 
 such authority could have no proper relation to 
 
40 
 
 the lands which the city had acquired in trust for 
 street purposes. We do not mean to question the 
 authority of the Lewis case, but merely to explain 
 the situation under which the decision was ren- 
 dered. For the purposes of this case the relator 
 is constrained to rely not only upon the Benson 
 deed but upon the resolution of the Common Coun- 
 cil approved February 1, 1832, for a right of 
 its lessor to enter upon and construct the portions 
 of its railroad upon the Benson tract. 
 
 From the center of the Old Road, practically 
 midway between 115th and 116th Streets to a 
 lioint substantially coincident with the centei 
 of 121st Street, the original tract or farm owner 
 was one Peter Poillon. Peter Poillon following 
 the lead of his neighbor, Benjamin L. Benson, had 
 his tract surveyed into lots with reference to the 
 streets shown on the city map, and gave the city 
 a similar deed of cession of the lands in the beds 
 of the streets intersecting his tract, including the 
 bed of Fourth Avenue. This was by deed dated 
 July 24, 1827, which was never recorded, but was 
 produced from the office of the Comi)troller of the 
 city. The same was received in evidence (fol. 
 1063) and is set forth at pages 355 to 357 of the 
 record. Although the Poillon cession deed was 
 not recorded, there may be a presumption of ac- 
 ceptance on the part of the city from the fact that 
 it was found in the custody of the Comptroller, 
 and in subsequent street opening proceedings the 
 strips of land comprising those portions of the 
 bed of Fourth Avenue within the 100-foot liinits 
 of the street on each side of the New York and 
 ITarlem Railroad Company’s right of way are 
 marked “ceded,” just as in the case of the Ben- 
 son cession. It must, therefore, be assmned that 
 the right of the New York and ITarlem Railroad 
 Company to enter upon that portion of its right 
 
41 
 
 of way across the Poillon tract was similarly de- 
 rived from the authority of the city embodied in 
 the ordinance approved February 1, 1832, as well 
 as from the Poillon deed to the Harlem Company 
 (fols. 192, 215) of the 24-foot strip. 
 
 From abont the center line of 121st Street, be- 
 ing the northerly boundary of the Poillon tract, 
 to a point known as the center of the Old Road, 
 which was not cpiite coincident with 124th Street, 
 the tract of land including the bed of Fonrth Ave- 
 nue as laid down on the city map, was vested in 
 an infant, Sampson Adolphus Benson, and the 
 Railroad Company in the same proceeding in 
 which it acquired title to the portion of its right 
 of way between 45th Street and 48th Street simi- 
 larly acquired (parcel first in order) the title of 
 Benson between 121st Street and the center of the 
 Old Road near 124th Street, paying a substantial 
 award which was made by the Commissioners ap- 
 pointed in the proceeding by the ^"ice-Chancellor 
 as outlined in the act incorporating the Xew York 
 and Harlem Railroad Company (fols. 193, 217). 
 
 IVorn about the south line of 124th Street, being 
 the northerly boundary of the Sampson Adolphus 
 Benson premises, to a point just south of 127th 
 Street, the lands comprising the bed of Fourth 
 AvoTUie, and adjacent tei-ritory, were owned l)y 
 Isaac Adriance; north of that point the lands 
 were owned princij)ally by Cliarlcs Henry Hall. 
 It appears that on January 16, 1828, Isaac Adri- 
 ance, Michael Floy and Charles Heniy Hall ceded 
 to the city that portion of Fourth Avenue to the 
 width of 100 feet as shown on the city map, cover- 
 ing that portion of their respective tracts which 
 extended from the north line of 125th Street to 
 the north line of 129th Street in trust for street 
 purposes. This deed was not recorded but was 
 produced from the custody of the Comptroller of 
 
42 
 
 the City of New York, received iu evidence (fol. 
 lu72) and is set fortn at pages 358-359 of the 
 record. Tins deed, however, did not affect that 
 portion of the Adriance tract which extended from 
 the center of the Old Road near the south line of 
 124th Street to the north line of 125th Street; 
 nor, similarly, did it affect that portion of the 
 Charles Henry Hall tract extending from the 
 north line of 129th Street to the Harlem River. 
 Both Adriance and Hall, and one Michael Floy, 
 gave the usual deed to the New York and Harlem 
 Railroad Company, dated January 18, 1832 (fols. 
 193-195; 227-231), conveying the strip of land 24 
 feet in width with the right to slope embankments 
 and excavations. Hall’s ownership extending from 
 a point just south of the south line of 127th Street 
 where the line of Isaac Adriance ended, to the 
 Harlem River (fols. 195, 233). Hall had conveyed 
 in 1828 the lots on the west side of Fourth Ave- 
 nue as laid down on the city map, extending from 
 129th to 130th Streets, to J. G. Russell (fol. 1175), 
 and it is claimed that this deed carried the title 
 to the center of Fourth Avenue in front thereof 
 (see Caldivell vs. Neiv York <& Harlem Railroad 
 Company, 111 App. Div., 164). We do not, how- 
 ever, so understand that decision. It amounted 
 to this, that Hall, having conveyed these lots prior 
 to his deed to the New Y’’ork and Harlem Railroad 
 Company, tlie easements in Fourth Avenue ap- 
 purtenant to said lots were unaffected by his deed 
 to the Harlem Company, in that respect differen- 
 tiating the Conaheer case (156 N. Y., 474). 
 
 As to the portions of these respective tracts not 
 theretofore ceded to tlie city, tlie deeds were un- 
 questionably valid and effective to vest in the New 
 York and Harlem Railroad Company the title to 
 its roadbed. Tlie validity of these titles was re- 
 peatedly passed upon by the courts in the so- 
 
43 
 
 called Park Avenue X'iaduct Litigation, brought 
 by abutting owners by reason of the elevation of 
 the tracks pursuant to Chapter 339 of the Laws 
 of 1892, and amending acts. Thus, in the Birrell 
 case (41 App. Div., 506) as in the Conaheer case 
 (156 X. Y., 474) it was held that as to the respec- 
 tive properties the title acquired by the Company 
 to the strip of laud 24 feet in width under the 
 muniments of title above mentioned, was absolute, 
 and authorized the erection of any lawful railroad 
 structure upon the strip of land in question with- 
 out liability to the abutters, the successors in title 
 respectively of Margaret McGown and Sampson 
 Adolphus Benson. 
 
 The learned counsel for the Intervenor City 
 of New Y'ork, has laid great stress in his brief 
 and arguments on the claim that the Company 
 did not secure a complete and unassailable title 
 from the private owners (except the City) of the 
 bed of the avenue to the extent required for its 
 railroad. But how does such omission or failure 
 create a special franchise? By what legal magic 
 is an outstanding title in a private owner con- 
 verted into aSi open public traveled street or 
 highway so as to make the strip of land in ques- 
 tion a special franchise within the meaning of tin* 
 tax law? 
 
 Summing up, tlien, the title situation from tin* 
 south line of 45th Street to the Harlem River, we 
 find that with slight exceptions, which need not 
 be discussed now, the right of the company to use 
 this strip of land then comprising a part of th(‘ 
 bed of the paper street was derived in the main 
 from two sources: 
 
 (1) T>y title acquiretl by deed or condemnation 
 from private owners; 
 
 12) By authority of the City einbodied in the 
 resolution aj)y)rovefl by the Mayor February I, 
 1832. 
 
44 
 
 At this stage of the proceedings the Railroad 
 Company had accomplished two results : it had 
 (1) complied with the terms of its charter so as to 
 vest in it the general, not special, franchise, con- 
 ferred by the State of New York to build its rail- 
 road, and maintain and operate the same upon 
 that portion of Fourth Avenue, being then a pa- 
 l)er street, extending from the south line of 45th 
 Street to the Harlem River; and (2) it had sub- 
 stantially secured the whole of its right of way 
 from the owners of the soil by deeds, and other 
 muniments of title, competent to vest in the com- 
 pany such title for the purposes of its railroad. 
 
 We are now brought in the examination of the 
 history of this railroad to the point where it took 
 possession of its roadbed thus secured, and pro- 
 ceeded with the construction of its railroad. 
 
 The facts relating to this stage of the enterprise 
 are so remote as to antedate the memory of living 
 men, and we are consequently relegated to ancient 
 documents to secure such light as they will shed 
 upon the circumstances. We find in the minute 
 book of the Directors of the New York and Har- 
 lem Railroad Company numerous entries showing 
 the executive methods employed in effecting the 
 construction of the railroad, and the dates at 
 which different acts in the progress of the con- 
 struction were performed. Under the authority 
 of Tlamerschlafi vs. Dun/ea (58 App. Div., 268, 
 291, affirmed without opinion, 172 N. Y., 622), the 
 Relator introduced m evidence (fob 1590) certi- 
 fied excerpts from the minutes of the Board of 
 Directors covering this ])eriod, the same being 
 marked Relator’s Exhibit No. 92 of Noveml)er 8. 
 1909, yn’inted in the Ayipendix (p. 898, fob 2692). 
 The general ])nryiose in getting these facts before 
 the Court was to show tliat the New York and 
 
45 
 
 Harlem Railroad Company through its agents and 
 contractors had entered into actual occui)ation of 
 the strip of land acquired for railroad purposes 
 along the center line of Fourth Avenue as laid 
 down on the city map, from the south line of 45th 
 Street to the Harlem River more than 20 years 
 before the proceedings suhsequently taken in 1850 
 under the act of 1813, and amending acts, for 
 opening Fourth Avenue as a public street were 
 consummated by final order entered in October, 
 1853. These proceedings will be hereinafter con- 
 sidered. The present consideration is that it 
 seemed desirable to show an adverse possession 
 of land hereinbefore mentioned as to which a])- 
 parently no muniments or imperfect muniments 
 of title were secured by the company. 
 
 It appears from these excer])ts of the minutes 
 that as early as February 1, 1832, sealed pro- 
 posals had been advertised for the grading of the 
 track, and that on that date the engineer of the 
 road presented to the Hoard his estimate of the 
 cost of constructing the railroad^ in which esti- 
 mate the railroad was divided into seven sections, 
 as follows tfols. 2705 to 2712) : 
 
 Section 1. From north side of 23rd Street to 
 north side of 30th Street. 
 
 Section 2. From north side of 30th Street to 
 north side of 58th Sti'cot. 
 
 Section 3. From north side of 58th Street to 
 south side of 73rd Street. 
 
 Section 4. F"roin south side of 73rd Sti'cet to 
 south side of 84th Street. 
 
 Section 5. From south side of 84th Street to 
 south side of 111th Street. 
 
 Section G. From south side of 111th Street 
 to south side of 124th Street. 
 
 Section 7. From south side of 124th Street 
 to Harlem River. 
 
At a meeting of the Directors on February 16, 
 1882 (fob 2714), the committee appointed to look 
 over the proposals of bidders rendered its report, 
 and the contracts for construction were awarded 
 hj' the Board to various contractors for the dif- 
 ferent sections 1 to 7 inclusive as shown on page 
 909, fob 2725. These contractors were as follows: 
 
 Section 1. Bernard McCafferty. 
 
 Section 2. Path. McCafferty. 
 
 Section 3. Path. & Jas. Moore. 
 
 Section 4. Path. McCafferty. 
 
 Section 5. Geo. J. Dickey & Co. 
 
 Section 6. Geo. J. Dickey & Co. 
 
 Section 7. Me. Tally & J. Devlin. 
 
 A motion was made at this meeting that the 
 contractors be set to work forthwith, working it 
 to the width of 24 feet (fob 2784). 
 
 It appears from the minutes of the meeting of 
 April 24, 1882 (fob 2789), that some work had 
 been done on sections 6 and 7, and the work being 
 done on unit prices the sums then due the con- 
 tractors were authorized to be paid. 
 
 On May 1, 1882 (fob 2742), Mr. Adriance re- 
 ported that he had so paid those contractors for 
 the 6th and 7th sections. Without going into more 
 details, it is perfectly apparent on reading the 
 excerpts of these minutes, particularly the rec- 
 ords of the amounts earned by the different con- 
 tractors upon their sections, and the audit and 
 ])ayment of their bills, that the contractors had 
 actually entered ipmn every ))art of the right of 
 way extending from 28rd Street to the Harlem 
 Itiver (we are concerned only with that ]iart of 
 the road from 45th Street to the Harlem River), 
 and had done something toward the construction 
 of the same; in other woi’ds, were in full oc(*u]ia- 
 tiou of the same. 
 
47 
 
 It appears from the minutes of the meeting of 
 November 8, 1833, that up to September 13, 1833 
 (fob 2865), the company had expended $241,693.93 
 for grading Fourth Avenue. While the company 
 tlius from the outset of the enterprise entered into 
 full possession of the entire strip, the railroad 
 was completed only in sections. It appears, for 
 example, that on November 9, 1832 (fob 2788), 
 the railroad had been so far completed that a sin- 
 gle track had been laid from Prince Street to 14th 
 Street, and the Mayor and Common Council were, 
 by resolution of the Board at a meeting held on 
 that day, invited to ride on the single track and 
 dine with the Directors. Some heavy construction 
 work was involved, as api)ears from the minutes 
 of the Board of December 24, 1832 (fob 2796), 
 authorizing a contract to drive a tunnel through 
 the hill at Yorkville between 90th and 95th Streets. 
 It appears that by ]\farch 29, 1833, the work was 
 so far advanced that sections 3 and 4 were ready 
 for the permanent rails (fob 2811). At the meet- 
 ing held July 19th, 1833 (fob 2835), the contract 
 for the erection of a station house at Yorkville 
 was authorized. The rejiort of a committee of the 
 Board to iiifpiire into and ascertain the best ])Iau 
 of ))roceeding with the work in regard to the En- 
 gineering De])artment was rendered at the meet- 
 ing of (^)ctober 11, 1833, which recites (fob 2855) : 
 
 “In as much as the whole plan of the work 
 has been laid out & the work has progressed 
 on that plan to a very great extent & mostly 
 under the Su])erintendence of the present as- 
 assistants,” etc. 
 
 It api)ears that the railroad was opened for 
 business to Yorkville sometime in thf‘ year 1834, 
 and was finally coni})leted to the llai'lem River 
 sometime in the year 18;’, 7. 
 
48 
 
 In 1834 tlie Common Council was memorialized 
 by various ])arCes to whom lands had been sold 
 or leased in 1790, being portions of the Common 
 Lands, to the effect that the City map of 1811 had 
 laid out a system of streets at variance with the 
 lines of the old Goerck map, and praying appro- 
 priate relief in the premises. It appears that the 
 Common Council then had the Common Lands 
 resurveyed and mapped so as to reflect the lines 
 both of the old Goerck map and of the City map 
 of 1811, This tract of land was accordingly re- 
 surveyed by Isaac T. Ludlam (See Relator’s Ex- 
 hibit A, p. 60, fob 178, reproduced in Appendix 
 pp. 771-774). 
 
 It will be seen from an inspection of this map 
 that the old lot lines on the Goerck map did not 
 coincide with the lines of Fourth Avenue, and 
 that there was an overlapping of the cross streets 
 upon premises which the City had conveyed or 
 leased. Accordingly the old conveyances from 
 the City were rectified and the holdings of the 
 grantees of the City of the Common Lands were 
 made to comply with the lines of the City map 
 filed in 1811 (fols. 1259-1279, pp. 420-427). 
 
 This circumstance is significant of the fact that 
 it was the determination of the City authorities 
 that, as required by the Legislature, the map of 
 1811 was not only to he the final layout of the 
 City, but that old streets laid out on the former 
 surveys and mai)s were to he regarded as discon- 
 tinued and obliterated so far as they in any way 
 conflicted with the lines of the City maj). 
 
 AVe next come to a significant step in the history 
 of this railroad, involving, as it does, a recog- 
 nition of the permanent occupation by the railroad 
 of the central portion of Fourth Avenue as laid 
 down on the city map. In the year 1835 a me- 
 morial of certain property owners along Fourth 
 
49 
 
 Avenue was presented to the Common Council 
 of the City of New York, alleging the desirability 
 of widening Fourth Avenue to the width of 140 
 feet upon the city map by reason of the oceu]ia- 
 tion of the middle part thereof by the New York 
 and Harlem Railroad. By resolution of the Com- 
 mon Council, api)roved by the Mayor February 
 17, 1837, it was 
 
 “Resolved, That the map or plan of the 
 city be altered so as to make the Fourth Ave- 
 nue 140 feet wide by adding 20 feet on each 
 side of the same from 34th Street to the 
 Harlem River. 
 
 Resolved, That the counsel of the Board 
 take the necessary measures to procure a law 
 of the Legislature authorizing such altera- 
 tion.” 
 
 (See Relator’s Exhibit U, Appendix p. 
 
 780; fols. 2338 to 2364). 
 
 Pursuant to this recpiest the Legislature, by 
 Chapter 274 of the Laws of 1837, duly widened 
 Fourth Avenue upon the city ma]j to the width of 
 140 feet, as specified in said resolution (fol. 180). 
 
 In Conaheer vs. The New York Central db Hud- 
 son River Railroad Company (156 N. Y., 478) tliis 
 transaction is thus desci’il)ed in the statement of 
 the ease : 
 
 ‘‘In 1835 the matter of widening Fouj-th 
 Avenue from 100 to 140 feet was brought be- 
 fore the common council by a petition re- 
 questing that the avenue be thus widene 1. 
 One, if not the chief, ground upon which this 
 was asked, was the exist(‘'ice of the railroad 
 in the center of that avenue. Subs(‘r|UGMtly. 
 and in 1837, the street was widened to 14') 
 feet.” 
 
50 
 
 We have already shown that prior to 1850, by 
 acts of the Liegisiatiire amending the charter ot 
 the ISIew i"ork and liarlem Eailroad Company, tiu' 
 latter had extended its line northerly across the 
 Harlem Hiver, and into and through the counties 
 of Westchester, Putnam, Duchess and Columbia, 
 and i)ursuant to legislative authority, had formed 
 a connection with what is now the New York, New 
 Haven and Hartford Railroad Company whereby 
 the trains of that company were operated over 
 the New York and Harlem tracks to the terminus 
 of tile New York and Harlem Railroad in the city 
 of New Y"ork. 
 
 We have then an ordinary steam railroad, con- 
 stucted over its privately owned right of way 
 between New York and Chatham, the southerly 
 end of said railroad, at least to the south line of 
 45th Street, being constructed over a strip of land 
 designated as the site of a public street, but uot 
 yet opened or used as such. 
 
 For nearly 20 years it had been assessed and 
 paid taxes as the owner of the soil and entitled 
 to the exclusive use of its railroad right of way. 
 To sustain the Apjiellate Division this Court must 
 say that Fourth Avenue througliout its length was 
 an open ])ublic street with all its attriliutes and 
 that as regard the Harlem CVnnpany it was 
 wholly unnecessary for the city to take any iiro- 
 ceediiigs to open Fourth Avenue. 
 
 In 1850 the city took the proceeding undei- 
 Chapter 86 of the Laws of 1813, and the acts 
 amendatory thereof, as such avenue was laid out 
 by the Commissioners of Streets and Roads of the 
 City of New York under Chapter 115 of the Laws 
 of 1807, and as later widened by Chaiher 274 of 
 the Laws of 1837. We say that the gcuieral act 
 under which this proceeding was taken had becoi 
 
51 
 
 as to Fourtli Aveuiie further amended by the 
 charter of the Xew York and Harlem f\ailroad 
 Company, Chapter 263 of the Laws of 1831, and 
 the acts amendatory thereof. This must neces- 
 sarily be the case, because the Legislature by spe- 
 cific act passed long subsequent to the general act 
 of 1813 devoted Fourth Avenue, whether opened 
 or unopened, to a public use inconsistent with the 
 use of the same land for the purposes of a public 
 street. The City had, therefore, no power under 
 a senior and general legislative grant or authority 
 to take and destroy property by subsequent and 
 express legislation devoted to another pul)lic use, 
 namely, that of a railroad. The city could only 
 maintain its proceeding in such qualified way as to 
 preserve without disturbance the railroad public 
 use. If the railroad use could not be })reserved 
 without affecting the street use then the latter 
 was bound to yield to the former. 
 
 Mills on Eminent Domain, Sec. 46 and 
 cases cited; 
 
 Matter of the City of Buffalo, 68 N. Y., 
 167; 
 
 Matter of N. Y., L. E. & W. Kv. Co., 
 99X. Y., 12; 
 
 Matter of Board of Street Opening, 133 
 N. Y., .329; 
 
 Matter of the Mayor, etc., of Xew York, 
 135 N. Y., 253, 256; 
 
 Matter of 161st Street, 52 ]\lisc., 596; 
 afiirmed on Opinion at Sj). Term, 120 
 N. Y. Sui,p., p. 839; 1.35 A. I)., 912; 
 affirmed without Opinion 198 X. Y., 
 606. 
 
 A more recent application of the rule abo^e 
 stated is found in X. V. Central and Hudson IC'vrr 
 It. It. Co. vs. at a of Ituffalo (200 N. V., 1 1.’!), 
 
 U. OF lU- UB. 
 
52 
 
 where the City of Buffalo opened Delevan Avenue 
 across the right of way of the plaintiff’s prede- 
 cessor company, thereby under the City’s charter 
 acquiring title in fee to the lands in question. The 
 Court held that the railroad use was not destroyed 
 but was preserved, and that the parcel of real 
 estate thus acquired for street purposes was held 
 subject to the senior and paramount easement in 
 the railroad company to use the whole of such 
 parcel to its full width for its tracks, notwith- 
 standing there was but a single track there when 
 the proceeding was consummated. 
 
 That it is possible for two public uses of the 
 same property to be preserved, and that it is the 
 duty of public authorities, wherever physically 
 possible, to preserve two public, and possibly in- 
 consistent, uses of the same laud is the express 
 holding of the Court of Appeals in Suburban 
 Rapid Transit Co. vs. The Mayor of New York 
 (128 N. Y., 510). 
 
 The city was evidently guided by the legal 
 principles above defined in the jn'oceeding to open 
 Fourth Avenue from 38th Street to the northerly 
 side of 135th Street, being the Harlem River. 
 The proceeding is described in the stipulation en- 
 tered into, and which is found at page 370, folios 
 1108-1117 of the record, and is further exhibited 
 so far as the damage map is concerned upon the 
 Havilaud map. Relator’s Exhibit AAA (A])]ien- 
 dix, p]). 058-972). The Commissioners of Es- 
 timate and Assessment a])]')ointed in that i)ro- 
 ceeding recognized the title of the New York and 
 Harlem Railroad Company as being of exactly 
 the same quality and extending throughout the 
 entire stretch from tlie southerly Hue of 45lh 
 Street to the Harlem River, notwithstanding the 
 fact that the comjiany’s title rested as to some 
 ])ortions upon the ordinance of the city approved 
 
February 1, 1832, as to other portions upon deeds 
 from parties who had parted with their title in 
 the bed of Fourth Avenue prior to the giving of 
 the deeds to the railroad company, as to still 
 other portions upon no paper title, and finally as 
 to the remaining portions upon absolutely good 
 and indefeasible muniments of title, as in the ease 
 of the deed from Margaret McGown, and the title 
 acquired through the condemnation of the lands 
 of the infant Sami^son Adolphus Benson. 
 
 The commissioners in thus recognizing the title 
 of the New York and Harlem Railroad Company 
 were unquestionably guided by the established 
 principle of law that 20 years’ adverse possession 
 under color of title by the railroad company had 
 cured whatever defects might have originally 
 existed in its title, inasmuch as the continuous 
 adverse possession for the statutory period of 
 twenty years had operated in law to transfer the 
 title from the original owners to the New York 
 and Harlem Railroad Company. 
 
 Code of Civil Procedure, Sec. 369. 
 
 Baker vs. Oakwood, 123 N. Y., 16. 
 
 The damage map, as already stated, in said 
 proceeding, is noted on the llaviland map (Aj)- 
 pendix (j)p. 958-972). 
 
 It appears from this maj) that the commis- 
 sioners divided the roadl)ed of the New York and 
 Harlem Railroad into parcels, or lots, extending 
 between the center lines of each of the cross 
 street. These i)arcels between 45th Street and 
 the Harlem River are nund)ei-(!d from 10t)7 to 
 1097 inclusive, and for each of these parcels the 
 commissioners awarded the sum of One dollar, 
 thus indicating that tln-re was no indication on 
 the f)art of the city to disturb the rights enjoyed 
 
54 
 
 by the New York and Harlem Railroad Company 
 in this strip of land. 
 
 The damage map is significant in other re- 
 spects : From 45th Street to 84th Street the New 
 York and Harlem Railroad right of way to the 
 extent of 23 ont of 24 feet in width is shown on 
 the damage map as being located within the limits 
 of the so-called East Road. The damage map, 
 however, indicates as the “East Road” only so 
 nmch thereof as lies westerly of the 24-foot strip, 
 and the strip between the railroad bed and the 
 original easterly line of Fourth Avenue is marked 
 “Corporation of New York,” between a point 
 about 60 feet north of 48th Street and the center 
 line of 84th Street, wherever the city had not 
 already deeded portions of the common lands 
 shaded in red abutting upon the easterly line of 
 the old East Road. The report of the commis- 
 sioners shows that substantial awards were made 
 to the private owners north of 84th Street, for 
 the strips of land on each side of the New York 
 and Harlem right of way, whereas, but the nomi- 
 nal award of One dollar is made to the railroad 
 company for each segment of its right of way 
 between the center lines of cross streets. 
 
 We have then in this proceeding, which was 
 duly confirmed October 29, 1853, an adjudication 
 that the New York and Harlem Railroad Com- 
 ]iany was the owner of this entire strip of land 
 from the southerly line of 45th Street to the Har- 
 lem River, and that it was entitled to compensa- 
 tion therefor, but that such compensation was 
 nominal by reason of the absence of intention to 
 disturb its possession of the street for railroad 
 imrposes, and because of the plain intent that the 
 street was to be used as a ])nblic street subject to 
 its paramount right to use a ])ortion of the same 
 for railroad pur])oses. Such adjudication is final 
 
00 
 
 and cannot be attacked in a collateral proceeding. 
 See 
 
 Conabeer vs. N. Y. Central & H. R. R. R. 
 Co., 84 Hun, 34, 39 ; 
 
 Matter of Application of Dept, of Public 
 Parks, 73 N. Y., 561; 
 
 DePeyster vs. Mali et al., 92 N. Y., 262; 
 Dolan vs. The Mayor, 62 N. Y., 472; 
 Lewisobn vs. Lansing Co., 119 App. Div., 
 393; 
 
 Matter of Belmont Street, 128 App. Div., 
 636. 
 
 In Conabeer vs. N. Y. C. d H. R. R. Co. (84 
 Hun, 34), alread)" referred to, the claim of the 
 plaintiff-appellant was that by the street opening 
 proceedings consummated in 1853 the deed from 
 Mrs. McGown to the Railroad Company was an- 
 nulled. In support of this proposition it was 
 asserted that the city could not acquire tlie fee 
 of the street subject to the right of tlie railroad 
 company to use a portion of it for its purposes. 
 Follett, J., says, page 39, in answer to this con- 
 tention : 
 
 “Incumbrances and easements burden 
 many estates, the title to which is held in fee, 
 and such burdens are not necessarily incon- 
 sistent with a title in fee. When the city 
 acquired the title to this avenue the New 
 York and Harlem Railroad Company was, 
 and for more than twenty years had been, 
 occupying the central portion of the street, 
 under legislative and munici))al authority, for 
 railroad purposes, and had erected therein, 
 pursuant to such authority, an expensive and 
 valuable structurCj and it cannot be assumed, 
 in the absence of proof, that for an award 
 of one dollar, the city intended to acquire, or 
 
oo 
 
 the corporation to surrender, its title to the 
 structure, or that tlie railroad intended to 
 surrender its long-enjoyed right to operate 
 its road in the avenue. The practical con- 
 struction by the city and by the railroad of 
 the effect of the acquisition of the title to this 
 street is opi)osed to such a contention. The 
 city never claimed to be the owner of the 
 structure, and the corporation was not com- 
 pelled to remove it, nor was its right to use 
 it abridged, and it has been held that the 
 structure is not the property of the city but 
 of the railroad (People ex rel. The N. Y. & 
 H. E. R. Co. vs. Comrs. of Taxes, 101 N. Y., 
 322). By Chapter 702, Laws of 1872, the title 
 of the railroad to its structure in the avenue 
 and the right to continue to operate its road 
 therein are expressly recognized.” 
 
 In Matter of Application of Department of Pub- 
 lic Parks (supra), the Court of Appeals said: 
 
 “The award of the commissioners of esti- 
 mate and assessment is required by the 
 statutes to be confirmed by the Supreme 
 Court, and when so confirmed is made final 
 and conclusive, both upon the city and the 
 owners of the land taken. (Laws of 1813, 
 chap. 8bj 113 ; Laws of 1865, chap. 565 ; Laws 
 of 1862, chajD. 483.) Under the statute of 1813 
 there is ample opportunity for the correction 
 of all mistakes of law and fact, and unless 
 they are corrected in the proceedings before 
 confirmation, all i)arties interested are pre- 
 cluded from comi)laining of them. The award 
 after confirmation becomes in the nature of a 
 judginent which cannot be assailed collater- 
 ally. It is as final and conclusive u})on all 
 imrties as a judgment. (Matter of Commis- 
 sioners Central Park, 50 N. Y., 493; In re 
 
0 / 
 
 Arnold, 60 id., 26; Dolan vs. The Mayor, 62 
 id., 472; Pittman vs. The Mavorj 62 N. Y., 
 637). 
 
 In De Peyster vs. Mali, et al., 92 N. Y., 262, the 
 Court said : 
 
 “By section 178 of chapter 86 of the Laws 
 of 1813, it is provided that the award of the 
 commissioners of estimates and assessments, 
 when confirmed, ‘shall be final and conclusive 
 as well upon the said mayor, aldermen and 
 commonalty of the city of New York as upon 
 the owners, lessees, persons and parties in- 
 terested in and entitled unto the lands, tene- 
 ments, hereditaments and premises men- 
 tioned in the said report, and also upon all 
 other persons whomsoever.’ Under this pro- 
 vision, while these awards were undoubtedly 
 excessive they were final and conclusive, and 
 this is so even if we must assume that they 
 should have been but for nominal damages, 
 and that the commissioners and the Supreme 
 Court, when it confirmed the report mistook 
 both the law and the facts applicable to the 
 case, and so it has freriuently been decided. 
 (Matter of Commissioners of Central Park, 
 50 N. Y., 493 ; Dolan vs. The Mayor, 62 id., 
 472; ^fatter of De])artment of Parks, 73 id., 
 560).’’ 
 
 It appears that over certain portions of its 
 right of way, namely, over the deiu-ession from 
 a point south of the old Harlem Pond to a i)oint 
 near 115th Street the railroad was originally con- 
 structed u])on a high viaduct or fill so that by no 
 l) 0 ssibility could the i)ublic physically us(‘ that 
 portion of the street occupied for railrf)ad pur- 
 poses. This was the situation opposite the (’ona- 
 bcer premises at the coriicr of 104th Sli'cct, which 
 
58 
 
 part of the right of way was conveyed to the 
 railroad company by Margaret McGown. One 
 of the contentious of the plaintitf in the Conaheer 
 case which was overruled by all the courts was 
 that the effect of the street opening proceedings 
 consummated in 1853, was to acquire whatever 
 title the railroad company secured from Mrs. 
 McGown, destroying the effect of her deed and 
 giving her successor in title, Mrs. Conaheer, a 
 cause of action for the invasion of easements of 
 light, air and access, by reason of the mainte- 
 nance and operation of trains upon this stone 
 viaduct structure. The original viaduct structure 
 supported two tracks and was 26 feet in width, 
 and the viaduct structure erected under Chapter 
 702 of the Laws of 1872 was some 56 feet in width. 
 Discussing the effect of the street opening pro- 
 ceedings, Martin, J., says (Conaheer vs. N. Y. C. 
 & H. R. R. R. Co., 156 N. Y., 474) at page 485 : 
 
 “Although, under the statute of 1807, the 
 commissioners appointed made a map which 
 included Fourth Avenue, still, until the street 
 was opened and the damages to the owners of 
 the land paid, the title remained in the 
 latter.” 
 
 Page 486: 
 
 “When this street was opened the munici- 
 pality assumed to acquire the title of the New 
 York and Harlem Railroad Company to the 
 property which it owned in Fourth Avenue, 
 awarding it therefor the nominal sum of one 
 dollar upon each lot. At that time, however, 
 the municipal authorities and the legislature 
 recognized the right of the railroad company 
 to continue its road in the street and in no 
 way disturbed its possession or the exercise 
 of that right. It is claimed that by this pro- 
 
59 
 
 eeeding the city became vested with the title 
 to the property of the railroad company, and, 
 hence, that the deed from Mrs. McGown to 
 the Xew York and Harlem Railroad Company 
 was abrogated and its effect wholly annulled. 
 This contention cannot be maintained. If it 
 be admitted that the naked title to the land 
 passed to the city, it is still clear that the 
 consent of Mrs. McGown to the construction 
 and operation of this road did not pass with 
 it. That grant was at least an irrevocable 
 consent to the use of the land for a specific 
 purpose, which continued and remained in the 
 corporation to which it was made. But if, as 
 claimed, it passed to the city, so that the city 
 had the right formerly possessed by the rail- 
 road company, then it is equally clear that 
 the right still exists, and as the city has con- 
 sented to the use of the street, Mrs. McGown 
 and her subsequent grantee are yet bound 
 by that grant. When the street was opened, 
 in 1853, the railroad was upon a high viaduct 
 along the center of the avenue which was in 
 the sole and exclusive possession of the rail- 
 road, and no portion of it was occupied as a 
 public street.” 
 
 Page 490: 
 
 “Under the circumstances of this case, it 
 is manifest that * * * the only streets for 
 public use which existed in Fourth Avcime 
 • • * were streets forty-two feet in width 
 upon each side of the viaduct occupied by the 
 defendants.” (Italics ours.) 
 
 It is evident that the Court considered that as 
 the charter of the New York aiul Harlem Rail- 
 road Company was subject to modification and 
 amendment by the Legislature, the street was 
 
60 
 
 opened subject to all the rights whether then 
 actually exercised or potential, and liable to be 
 thereafter exercised under legislative authority 
 by the New York and Harlem Railroad Company. 
 
 It vdll be seen that the primary purpose and 
 the main accomplishment of Chapter 702 of the 
 Laws of 1872 was to abolish existing grade cross- 
 ings and the occupation of the surface of Fourth 
 Avenue bj" railroad tracks, so that street uses 
 and railroad uses would be wholly separated. The 
 railroad companies were required to spend (for 
 those times) a vast sum of money to accomplish 
 this result, and one of the compensations for such 
 exi)enditure was the grant by the Legislature of 
 the right to lay two additional tracks upon the 
 railroad structures prescribed by the Legislature. 
 
 To some extent this involved the destruction 
 of the street use and the devotion of the land 
 involved to purely railroad uses. No constitu- 
 tional conditions as to local consents rested upon 
 the Legislature in making such change in the 
 status of Fourth Avenue at the time, and it was 
 competent for it to carve out of the land com- 
 prising the strip of real estate 140 feet in width 
 and known as Fourth Avenue a permanent ease- 
 ment to lay and maintain two additional tracks, 
 and convey such easement to the railroad com- 
 panies. This we submit was the legal effect of 
 the transaction. When, therefore, pursuant to 
 the reserved power to alter and amend, the Legis- 
 lature by Chai)ter 702 of the Laws of 1872, author- 
 ized and required a different and wider railroad 
 occupation of Fourth Avenue, it conferred no 
 new or inde])endent franchise, it simply modified 
 the right conferred in 1831, which was a general 
 and not a s])ecial franchise within the definition 
 of the tax law. 
 
61 
 
 A special francliise, subject to taxation witliiii 
 the definition of Chapter 71*2 of the Laws of 1899, 
 is restricted to 
 
 “all franchises, rights or permission to con- 
 struct, maintain and operate surface, under- 
 ground or elevated railroads in, under, above, 
 on or through streets, highways or public 
 places,” 
 
 and a special franchise under the act shall be 
 deemed to include the 
 
 “value of the tangible property of a person, 
 co-partnership, association or corporation 
 situated in, on, under or above any street, 
 highway or public place, or public waters, in 
 connection with the special franchise.” 
 
 The definition assumes that the strip of land as 
 to which a special franchise is asserted must be at 
 the time the franchise is created, some existing, 
 duly constituted street, highway or public place. 
 
 In People ex rel. Metropolitan Street Railway 
 Company vs. Tax Commissioners (174 N. Y., 417), 
 the distinction between the general franchise of a 
 corporation and the special franchise subject to 
 taxation, is thus described by Vann, J., at page 
 4.35 : 
 
 “The general franchise of a corporation is 
 its right to live and do business by the exer- 
 cise of the corporate powers granted l)y the 
 state. The general franchise of a street rail- 
 road company, for instance, is tin* s])ecial 
 privilege conferred by the state upon a cer- 
 tain number of persons known as the cori)ora- 
 tors to become a street railroad cor])oration 
 and to construct and operate a street railroad 
 under certain conditions. Such a franchise, 
 however, gives the corporation no right to do 
 anything in the public highways without 
 
62 
 
 special autlioiity from the state, or some 
 municipal officer or body acting under its 
 authority. When a right of way over a public 
 street is granted to such a corporation, with 
 lease to construct and operate a street rail- 
 road thereon, the privilege is knovm as a spe- 
 cial franchise, or the right to do something in 
 the public highway, which, except for the 
 grant, would be a trespass.” 
 
 Applying this definition to the facts before the 
 C^ourt, the New York and Harlem Railroad Com- 
 ])any received from the State a general franchise 
 to exercise the power of a railroad corporation in 
 its organization, the location of its line, the ac- 
 quirement of its right of way by purchase or con- 
 demnation, and the right to exact tolls from the 
 Xmblic for the use of the transportation facilities. 
 No special franchise was conferred, except as to 
 that portion of Fourth Avenue which had at the 
 time become a public street, namely, below 38th 
 Street, a portion of Fourth Avenue with which the 
 present case is not concerned. 
 
 In Lord vs. Equitable Life Asenrance Society 
 (194 N. Y., 212), the above quotation from the 
 Metropolitan Street Railway case is set forth in 
 the opinion of Vann, J., with aiqiroval, prefaced 
 with the following statement, p. 225: 
 
 “The charter of a corporation is the law 
 which gives it existence as such; that is, its 
 gcmeral franchise, which can be re]iealed at 
 the will of the Legislature. A special fran- 
 chise is the right granted by the public to use 
 l)ublic i)roperty for a ])ublic use, but with 
 private profit, such as the right to build and 
 operate a railroad in the streets of the city. 
 Such a franchise when acted u])on becomes 
 property and cannot be repealed unless ])ow(‘r 
 to do so is reserved in the grant, although it 
 
G3 
 
 may be condemned upon making . compensa- 
 tion.” 
 
 Can it be seriously asserted that Fourth Ave- 
 nue above -l-5th Street was “public property” in 
 1831 ? 
 
 A case now pending in the courts, which we 
 submit is not distinguishable in its legal aspects 
 from the case at bar, is People ex rel. Long Island 
 Railroad Company v. State Board of Tax Com- 
 missioners, Appellate Division, Second Depart- 
 ment, reported in 133 N. Y. Supp., 348; * * * 
 App. Div. * * * * 
 
 The Brooklyn & Jamaica Railroad Cominiiiy 
 was, like the New York & Harlem Rail- 
 road, organized under a special act of the 
 Legislature, Chapter 256, Laws of 1832, for 
 tlie i)urpose of building a railroad between 
 Brooklyn and Jamaica. There was a provision. 
 Section 28, similar to that in the charter of the 
 New York & Harlem Railroad Company, requir- 
 ing that no street or highway in Brooklyn should 
 be made use of by said liailroad Conqiany for its 
 railroad without the permission of Brooklyn first 
 liaving been obtained. The Long Island Railroad 
 Company, organized by si)ecial act, C’hapter 178 
 of the Tjaws of 1834, subsecpiently leased the rail- 
 road of the Brooklyn & Jamaica Railroad Com- 
 pany and the right of way of the railroad was 
 acquired by purchase or condemnalion exactly as 
 was that of the New York & Harlem Railroad 
 Company and the railroad l)uilt. Subsequently a 
 new street, Atlantic Avenue, was laid out so as to 
 include within its limits in part the right of way 
 of the railroad of the Brooklyn k Jamaica Com- 
 pany and an agreement was entered into in 1855, 
 sanctioned by an act of liegislature of that year, 
 (’hapter 475, whereby the Bailroad Conqiany was 
 
64 
 
 to surrender its roadbed and change its location 
 so as to occupy the central thirty-foot strip of the 
 projected avenue. 
 
 The proceeding was commenced to open Atlan- 
 tic Avenue in the latter part of 1855 and consum- 
 mated by final order in 1860. In this proceeding 
 it was subsequently held that the City of Brooklyn 
 acquired the absolute fee of the land within the 
 limits of Atlantic Avenue as laid out, and that the 
 Railroad Company acquire only a right in the 
 nature of an easement to occupy the central 
 thirty-foot strip with a two track railroad on one 
 grade. It will be observed that the street was 
 entirely opened before the railroad entered into 
 it and that in effect it secured, by virtue of the 
 agreement with the City and the Act of the Legis- 
 lature, the right to occupy the central portion of 
 the public street then open for its railroad. It 
 will be observed how much stronger, in this re- 
 spect, the Atlantic Avenue case is in support of 
 the proposition that the railroad occupied what 
 the Tax Law subsequently defined as a “special 
 franchise.” In 1897 the Legislature passed an 
 Act, Chapter 499, requiring the improvement of 
 Atlantic Avenue in a fashion quite similar to the 
 improvement acts in Park Avenue, the Act being 
 apparently modeled both upon Chaiffer 702 of 
 the Laws of 1872 and Chai)ter 3.49 of the Laws 
 of 1892, being the Park Avenne Improvement 
 Acts. The status of the City and of the Railroad 
 Com])any, with reference to this central tliirty- 
 foot strip, was determined l)y this Court iu Matter 
 of Long Island Railroad Co., 189 N. Y., 428; iii 
 Leffmann v. Long Island Railroad Compang, 120 
 App. Div., 528, affirmed 187 N. Y., 518; aud also 
 in Long Island Railroad Compang v. Citg of Xeir 
 York, 199 N. Y., 288. 
 
65 
 
 This Court held that the Railroad Company 
 had only an easement and that after the grade of 
 its railroad was changed i:)ursuant to the Improve- 
 ment Act so as to make the railroad go above and 
 under ground, it had no right to use the surface 
 of the central portion of Atlantic Avenue for an 
 additional trolley line. 
 
 If there is any virtue in the doctrine of estoppel 
 as applied to a railroad company in occupying a 
 paper street, there would seem to he all the more 
 ground in claiming an estoppel preventing it from 
 maintaining that an opened and publicly used 
 street was not such on the question of whether its 
 occupation did or did not constitute a special fran- 
 chise. The courts, however, in the Atlantic Ave- 
 nue case have thus far unanimously held that the 
 railroad occupation of Atlantic Avenue is not a 
 special franchise and that the State Board had no 
 power, authority or jurisdiction to assess the 
 same as a special franchise. When this case was 
 before the Special Tenn, Mr. Justice iMarean said 
 (see New York Law Journal, December 14, 1910) : 
 
 “The only difference I can discover be- 
 tween the Long Island Railroad’s interest in 
 the thirty-foot strip and the interest which 
 railroads obtain upon condemnation of a right 
 of way by ordinary methods, is that the re- 
 verter here will he to the city for street uses 
 generally in case of abandonment while in 
 the other cases it is to the owner at the time 
 of condemnation * * *. I do not think 
 
 the case is within the spirit and ])urpose of 
 the special ?''ranchise Tax Law. I think the 
 strip should be assessed to the railroad locally 
 as other land is assessed, and that the assess- 
 ment laid by the State Board should be va- 
 cated. Judgment accordingly.’’ 
 
66 
 
 In the unanimous affirmance of this decision, 
 the Appellate Division, Second Department, Mr, 
 Justice Burr writing, says (183 N. Y. Supp., 350) : 
 
 “We think that the right which relator has 
 to construct, maintain, or operate its road on 
 said strip of land is not such a right as was 
 contemplated by the amendment to the tax 
 law, providing for the taxation of a special 
 franchise (Laws of 1899, Chap. 712). The 
 object of this amendment was to reach 
 and subject to taxation ‘property scattered all 
 over the state worth nearly $200,000,000, 
 which was not taxed at all and had never 
 been taxed.’ People ex rel. Met. St. Ry. Co. 
 v. Tax Commissioners, 174 N. Y., 417, on page 
 437. 
 
 “In People ex rel. Hudson S Manhattan 
 Railroad Co. v. State Hoard of Tax Commis- 
 sioners, 203 N. Y., 119, the Court says: 
 
 ‘The right to enter the streets is under the 
 statute unquestionably a special franchise.’ 
 
 “But this language must be construed with 
 reference to the facts existing in the cases 
 then under consideration. We think that it 
 should be limited to a case where the privi- 
 lege to occupy the street or highway results 
 solely from permission by the proper author- 
 ities, and where the railroad company has no 
 estate or interest in the land itself over which 
 it is operating its road. There may he a 
 ‘right of way’ owned by a railroad corpora- 
 tion and by reason thereof it may be author- 
 ized to construct and operate a railroad over 
 land which subsequently becomes a public 
 street, which right will not necessarily be a 
 special franchise within the meaning of the 
 tax law. A railroad company may i)ossibly 
 occupy land which is within the boundaries 
 of an existing public street, and do so by 
 
67 
 
 virtue of a right therein iudepeudeut of mere 
 permission to use the street. In such case it 
 may not be liable to be assessed as for a spe- 
 cial franchise. As was said in People ex rel. 
 Met. St. By. Co. v. Tax Com’rs, supra; 
 
 ‘The statute should be considered in the 
 light of the circumstances existing when it 
 was passed, which were extraordinary and 
 unprecedented. ’ 
 
 “When a railroad is maintaining and oper- 
 ating its road upon its own right of way, and 
 what is done therein is done by virtue of the 
 ownership of the soil or of some interest 
 therein, even although this right of way may 
 be included ^\'ithin parallel lines upon either 
 side thereof, constituting the boundaries of a 
 street or highway, this right is not a special 
 franchise, subject to taxation. This seems 
 to be clearly within the principle established 
 in People ex rel. Hudson & Manhattan Co. v. 
 Tax Com’rs, suj^ra, and People ex rel. N. T. 
 C. R. R. Co. V. Woodbury, 203 N. Y., 167, 96 
 N. E., 431. In the latter case it was said: 
 
 ‘A street crossing franchise consists of the 
 right to lay tracks across a street and use 
 them, when but for a grant of the right to do 
 so from competent i)ublic authority it would 
 be a tresi)ass. ’ Hut ‘if, after they have tlieii- 
 rights of way secured over private land, a 
 public highway is laid across the tracks, wliih* 
 there is a crossing it is not a crossing made 
 by the railroad or through ])ublic favor so 
 far as the railroad is concerned.’ ” 
 
 “If it possesses its right of way by ])ur- 
 chase or as matter of right, it does not hold 
 it as a matter of ‘public favor.’ It may be 
 an anomalous situation that a railroad cor- 
 7 )oration should hold a private aiid exclusive 
 right*of way through a public llioroughfare, 
 but the situation with regard to At laid ic A\-e- 
 
68 
 
 nue and the improvement thereof is an anom- 
 alous one, and must be dealt with accordingly. 
 It is doubtful if it had a parallel anywhere 
 within the state. Prior to 1855 we find re- 
 lator or its predecessors in interest owning 
 a private right of way to the north of the 
 then existing line of a j^rojected street as laid 
 down on the map, but not actually opened. 
 We find it entering into an agreement with 
 the city of Brooklyn, by means of which, in 
 order to enable the latter to construct ‘a noble 
 avenue 120 feet wide’ {Matter of Long Island 
 R. R. Co., supra), it ceded to the city the land 
 which it owned in fee, receiving as a consid- 
 eration therefor ‘forever * * * the ex- 
 
 clusive right to use and occupy a strip or 
 space of the width of thirty feet’ in the center 
 of said avenue as widened and extended. The 
 avenue from the very moment of its construc- 
 tion was ‘subject to an easement for railroad 
 purposes over the central portion.’ Matter 
 of Long Island R. R. Co., supra. Relator’s 
 right to the use of this portion of the street 
 was not by public favor, but because of its 
 ownership of an easement therein, acquired 
 for a valuable consideration, pursuant to con- 
 tract and legislative act, contemporaneously 
 with the construction of the street itself, and 
 as a part of the general scheme therefor. It 
 was a right founded upon an interest in the 
 land itself. If this is not the case of a street 
 coming to a railroad, as in People ex rel. N. 
 Y. C. R. R. Co. V. Woodbury, supra, neither 
 is it the case of a railroad coming to an ex- 
 isting street. Both the street and the railroad 
 easement came into existence together. No 
 additional right was conferred upon the rail- 
 road by the construction of the street. On 
 the contrary, in connection with i5uch con- 
 struction it acquired a right of way therein 
 
C9 
 
 only by way of easement, while surrendering 
 and ceding a right of way in fee. Nor is this 
 a case where relator is seeking to evade its 
 just liability to taxation. Previous to the 
 passage of the special franchise amendment, 
 for a long period of years it had been taxed 
 upon its property rights in this strip and had 
 discharged its obligations in connection 
 therewith. 
 
 “We deem the action of the State Board of 
 Tax Commissioners erroneous, and the order 
 vacating and setting aside the assessment of 
 the relator as for a special franchise should 
 be affirmed, with $10 costs and disbursements. 
 All concur.” 
 
 We are informed that an appeal was taken from 
 this decision of the Second Appellate Division to 
 this Court and is now pending and probably will 
 be argued at or about the same time as the present 
 appeal. The opinion of the learned Ai)pellate 
 Division, Third Department, in the case at bar is 
 so exactly opposed to the reasoning and decision 
 of the Second A])pellate Division that we do not 
 see how the two divergent theories of decision can 
 both survive the review of this Court. In tlu* 
 Atlantic Avenue case the Kailroad Company re- 
 linquished its private right of way, including the 
 partial occiq)ation or intersection of public streets 
 in J>rooklyn, to occuiw a portion of the public 
 highway previoush/ laid out and o])ened. In the 
 case at bar the New York & llailem Railroad 
 Company acr|nired its private right of way along 
 the center of a projected unopened sti'eet, and 
 suhsequenlbf, twenty years after its original occn- 
 ftation, its title was acquired by the City in a strecd 
 opening j)roceedin'r. 
 
 In /Vop/c CT rrl. Xf'w York CcnfraJ cf lltidson 
 liivpr Ihiilroofl C'owjxini), v. Wondburif, ‘JO.'l 
 
N. Y., 167, two questions were decided by tliis 
 Court: First, that the special franchise pro- 
 \isions of the Tax Law do apply to steam rail- 
 road occupations of pre-existing highways; and 
 second, that wdien a highway is opened and con- 
 structed across or along an existing railroad, the 
 railroad may not be taxed as for a special fran- 
 chise. In that case we understand that when the 
 original railroads of the predecessor companies 
 of the relator were built in the City of Buffalo 
 they crossed or occupied numerous streets laid 
 out on filed maps which, at the time, had not been 
 opened or used as public highways, but whicli 
 were subsequently opened and used. ■ That situa- 
 tion, we submit, was quite as susceptible to the 
 contention that the railroad was built with notice 
 of the inchoate streets and that the railroad com- 
 pany was estopped from asserting that they were 
 not public streets for the purpose of complying 
 with the definitions in the Tax Law as to special 
 franchises. Very much the same argument was 
 made by the respondent in that case to sustain the 
 jurisdiction of the State Board of Tax Commis- 
 sioners as has been made by the learned A]qiellate 
 Division in this case. 
 
 This Court, in Albany Northern R. R. Co. v. 
 Broivnell, 24 N. Y., .345, speaking by Chief Judge 
 Denio, sustained the constitutionality of a statute 
 which authorized the laying out of a subsequent 
 highway across an existing railroad without com- 
 j^ensation to the latter. In commenting on this 
 decision the Conrt says iier Vann, J.: 
 
 “The actual decision was that chapter 62 
 of the Laws of 185.3, now repealed but re- 
 enacted with some safeguards by the Grade 
 Crossing Act; in authorizing the construc- 
 tion of highways across railroad tracks with- 
 out compensation, does not violate the con- 
 
71 
 
 stitutional provision against taking private 
 property for public use or impair the obliga- 
 tion of contracts. This is far from holding 
 that the charter of a railroad company in- 
 volves the grant of a franchise hy anticipa- 
 tion whenever a new street is laid out across 
 its tracks. 'When the relator or its predeces- 
 sor acquired its right of way, whether in fee 
 or not is unimportant, it had the right to use 
 it without the grant of any further privilege 
 from the State. It was its own property, 
 acquired by the condemnation or purchase of 
 land or an interest therein from private 
 owners, with no grant from the State. Years 
 afterward, when a highway was extended over 
 its right of way, no grant was made to it of a 
 franchise or anything else, but something was 
 taken away from it without comi)ensation, 
 which could be justified only upon the ground 
 that Judge Denio placed it. In other states 
 compensation has been held under such cir- 
 cumstances essential to the validity of the 
 statute. {Illinois Central R. R. Co. v. City of 
 Rloomington, 7G III., 447 ; Chicago S Grand 
 Trunk R. Co. v. Hough, 61 Mich., 507; Old 
 Colony & Fall River R. R. Co. v. County of 
 Plymouth, 14 Gray, 155.) As the relator 
 owned its right of way it had all it could get 
 and all that it needed. No grant of a special 
 franchise was necessary, and never became 
 necessary, for it built its road on its own 
 private right of way. It did not cross an ex- 
 isting street, but a new street came to it and 
 crossed its tracks, thereby adding a burden 
 but conferring no benefit. Instead of the 
 railroad having an easejnent to ci’oss the 
 street the street has an ♦•asernent to cross the 
 railroad. (N. Y. C. <£ II. R. R. R. Co. v. City 
 of Rn ffalo, 200 N. V., 1 1 d, 110.) 
 
 “The relator acce])ted its charter to be a 
 
railroad corporation, and the charter was 
 subject to amendment under the power re- 
 served by the legislature and hence was sub- 
 ject to the prospective burden of streets being 
 extended across the tracks; still the statute 
 subsequently imposing that burden did not 
 make a grant or create a special franchise. 
 In other words, the general franchise or char- 
 ter of the relator or its predecessor author- 
 ized the construction of a railroad from the 
 city of Buffalo to some other terminal point. 
 Afterward, the fee of the land necessary to 
 construct the road, or a right of way over the 
 same, was acquired and after the railroad 
 had been in operation for years the street 
 came along and crossed it, but the right of the 
 railroad to keep its tracks where they were 
 continued the same as before. It remained 
 in possession by virtue of its original prop- 
 erty right only. When the legislature under 
 its reserved power so amended the charter 
 of all railroad corporations as to authorize 
 new streets to be extended over their tracks 
 already laid on private rights of way, it did 
 not intend to grant and did not in fact grant 
 a special franchise. Nothing in the statute 
 or in the history of legislature upon the sub- 
 ject warrants such an inference. The question 
 is not what the legislature may do but what it 
 has done. 
 
 “The object of the Special Franchise Tax 
 Act is to tax railroad corporations for privi- 
 leges granted them in the streets which they 
 occupy on their lines of railway and if, after 
 they have their rights of way secured over 
 private land, a public highway is laid across 
 the tracks, while there is a crossing it is not a 
 crossing made by the railroad or through 
 public favor so far as the railroad is con- 
 cerned. The relator, or one of its predeces- 
 
73 
 
 sors, was given the right to be a corporation, 
 to acquire land and to build its road between 
 certain terminal points. It bought its right 
 of way and built its road accordingly. It 
 needed no special franchise in order to use 
 and enjoy its right of way to the utmost ex- 
 tent possible for railroad purposes. Years 
 afterward a street was run across its tracks 
 and a crossing thus created. Such a crossing, 
 made under such circumstances, is not a spe- 
 cial franchise within the meaning of the 
 statute, because the railroad was built on its 
 own right of way before the street came into 
 existence and no additional right was granted 
 to the railroad company by the extension of a 
 highway across its tracks.” (Italics ours.) 
 
 Great stress is laid by the respondents and by 
 the learned Appellate Division upon the fact that 
 the Kailroad Company secured the consent of the 
 City by ordinance approved February 1, 1832, as 
 the owner in its private cai)acity of the so-called 
 common lands and as donee of certain portions of 
 Park Avenue described in deeds of cession from 
 the original owners to construct, maintain and 
 operate its railroad. It is claimed that this con- 
 stituted a special franchise. The Court at Special 
 Tenn made a finding that it did not (fol. 1824). 
 
 'I’lie case of People ex I’cl. Hiiflsoii and Manhat- 
 tan Railroad Company v. Tax Connnisfiioners, 203 
 X. V., 110, was decid(*d nearly at tin? saine linn* as 
 the Huffalo Francliise 3’ax Case above men- 
 tioned, and involve<l tin* question whetlier a grant 
 from the Land Board of tin* l iglit to dri\'(* a tnn- 
 in*l under tin* Hudson l{iv(*r, upon or innl(*i- land 
 owned by the State, was a g!'an1 of a si)eeial fran- 
 chise. In lif)lding the in*gative of this pi-oposi- 
 tion, the Coui’t said, per ('ull(*n, Ch. 203 X. 
 120 ; 
 
74 
 
 “Tlie action of the land commissioners was 
 not a grant to the company of any franchise. 
 It was simply a grant of a title to land. 
 Whether the letters patent conveyed a fee 
 or an easement is immaterial. The Company 
 acquired by it such an interest in the land as 
 to authorize it to construct thereon its tun- 
 nels and railroad, not under any special fran- 
 chise, but by virtue of its ownership of either 
 land or an easement therein. ’ ’ 
 
 Judge Gray, in a concurring memorandum, 
 gives the following terse definition of a si)ecial 
 franchise, 203 N. Y., 132: 
 
 “A special franchise granted to a railroad 
 corporation is a right accorded to it to main- 
 tain its road, where, without such authority, 
 to do so would be unlawful. What public 
 places, or highways, are within the legisla- 
 tive intent when defining special franchises 
 can be determined, only, by the language of 
 the statute. While the river is a public high- 
 way, that such a highway was not in con- 
 templation, when speaking of the operation of 
 railroads is sufficiently evident by the context ; 
 or, if not, it is left in such doubt as to de- 
 mand more explicit legislation.” 
 
 The Court, in its opinion, adverts to the cir- 
 cumstances that the Hudson River Railroad 
 Company acquired from the Land Hoard, for the 
 purpose of its railroad right of way, long stretches 
 of land under waters of the Hudson River cross- 
 ing the numerous bays and inlets, and holds that 
 the right thus obtained was in no resi)ect a spe(*ial 
 franchise. We do not see how the situation nscul 
 by way of illustration by the Court can be dif- 
 ferentiated from the present one where the rail- 
 
75 
 
 road company acquired from tlie owners of a 
 strip of land, including the City of New York in 
 its private capacity, which strip had never been 
 opened or used as a public street, the right to 
 lay its railroad tracks thereon. 
 
 S])ecial franchises are si)ecies of ])roi)erty dis- 
 covered but not invented by the legislature. 
 
 It was apparently felt by counsel for the de- 
 fendants during the progress of this litigation, 
 which extended over a considerable time in ad- 
 vance of the decision of Mr. Justice Chester, now 
 held to be erroneous in the Buffalo Franchise 
 case, that it was quite unsafe for the defendants 
 to rest the legality of this assessment merely upon 
 the proposition that the street had been opened at 
 the time the assessment was laid. Counsel appar- 
 ently believed that the subsequent highway ques- 
 tion would be resolved as the Court of Appeals 
 has now decided it, and a very serious and per- 
 sistent effort was made to sustain the legality of 
 this assessment upon other grounds, which it 
 seems now appropriate to examine briefly and in 
 order. 
 
 1. Chapter 263 of the Laics of 1831 incorporat- 
 ing the New York and Harlem Railroad Com- 
 pany, did not confer a special franchise upon the 
 railroad company as to certain unopened por- 
 tions of Park Avenue. 
 
 This general proposition we have already dis- 
 cussed. The fact that Fourth Avenue was at tlu^ 
 time of the f)assing of this aet a pai)er street 
 shown ui)on the inap of the C'ity of New ^'ork, does 
 not make its status any different from that of any 
 street which might be projected and laid out 
 across or along the existing right of way of a 
 railroad company by lawful authority. Tin* faet 
 that the title to this strip of land was vesteci in 
 
76 
 
 private owners was fully recognized by the Legis- 
 lature in the act incorporating the Harlem Rail- 
 road Company, as shown by those sections of the 
 act which provided for the acquisition of title in 
 fee by the railroad company, by voluntary grants, 
 or by purchase, or in case of inability to agree 
 with the owners by condemnation proceedings. 
 If it had been deemed that Fourth Avenue 
 throughout its length from the Harlem River to 
 23rd Street was an opened jmblic street such pro- 
 visions would have been quite unnecessary, and 
 the fact that Fourth Avenue was at the time un- 
 opened, and merely a paper street, was recog- 
 nized by the Legislature as shown by those pro- 
 visions of the incorporating act which required 
 the railroad company to obtain the consent of the 
 City in case the railroad were located by its direc- 
 tors upon an unopened street. After the City had 
 approved the location map of the Harlem Rail- 
 road as required by the incorporating act, what 
 further right remained outstanding except that 
 of the owners of the soil? All the circnm- 
 stances which create the legal situation where 
 it may be said that a special franchise exists, 
 are lacking here. As is well known, and 
 has been repeatedly recognized in judicial o])in- 
 ions, the object of the Ford franchise tax 
 law was to reach a species of property not thereto- 
 fore taxable, and in i)ossessing which, certain ele- 
 vated and surface I’ailroads, built u])on or over 
 existing jmblic streets, enjoyed an unfair exem])- 
 tion as compared with the ordinary steam sur- 
 face railroad. In the former case the right of 
 way of the railroad was already acquir(*d by the 
 City, its roadbed was const imcted and nothing re- 
 mained but the laying of rails on the surface, or 
 the erection of the su])i)orting columns of the 
 '"levated structure in the streets; all this was 
 
provided without cost to the railroad company. 
 Moreover, the earnings of such a company are al- 
 most wholly dependent upon the fact that it draws 
 its patronage from the very street which it trav- 
 erses. Contrariwise, tlie ordinary steam sur- 
 face railroad locates its own right of way, ac- 
 quires title thereto by purchase, or condemnation, 
 and usually at a very large expense, and is put 
 to the further great expense of leveling inequali- 
 ties in the earth’s surface so as to obtain a proper 
 and feasible roadbed with suitable grades. 
 
 This was precisely what the New York and 
 Harlem Eailroad Company did and operated its 
 railroad, paying taxes as locally assessed for its 
 private right of way and railroad structures like 
 any other ordinary steam surface railroad trav- 
 ersing the country, until 20 years later the naked 
 fee of its road bed was acquired, and merely nomi- 
 nal awards made therefor, so that the City parted 
 with nothing in getting the naked title. It would 
 seem palpably inequitable that the City should 
 under the guise of an alleged special franchise 
 collect taxes upon a heavy assessment based u))ou 
 a mere technical title of the City which cost it 
 nothing substantial. 
 
 As has been shown, the Railroad (Jomjniny 
 parted with value in securing its right of way 
 by condemnation over the tract of Henson and 
 others; it acquired an undoubtedly good title in 
 fee from Archibald Watt, Margaret MeCown, 
 Isaac Adriance and others by deed. It quieted 
 title by its long possession to other portions of 
 the Avenue. If the Railroad had never been proj- 
 ected or built, when the City reached the ))oint 
 of opening Fourth Aveime, it would hav(* had to 
 pay substantial amounts for the lands owned by 
 these private parties or their f)rivies in estate. 
 
78 
 
 All this expense is saved to the City. It takes 
 the acquisitions of the Railroad Company which 
 is awarded only nominal damages; in effect the 
 City secures title to this portion of Fourth Ave- 
 nue for nothing. Upon this undisputed basis of 
 fact, the learned Api)ellate Division reasons as 
 though Fourth Avenue had been opened through- 
 out its entire length in 1831 ; as though the City 
 had acquired full title to the land and expended 
 its funds for grading, regulating and paving the 
 same for street purposes. 
 
 This wholly fictitious and assumed situation it 
 says the Railroad Company is estopped from 
 questioning. Why? We are not enlightened. The 
 judgment is pronounced as the finality in a proc- 
 ess of reasoning which the opinion does not set 
 forth. The ordinary conception of an estop])el in 
 pais arises when a party makes a representation 
 or takes a position, whether true or false in fact, 
 on which the party adversely interested or affect- 
 ed, relies and changes his position accordingly. To 
 secure the ends of justice, the first party is not 
 permitted to swerve from his original ])osition. 
 The most that can be said of the Harlem Rail- 
 road Company is that it knew, when laying out 
 and building its railroad, that Fourth Avenue 
 above 38th Street was a paper street laid down 
 on the City Map made by Commissioners under 
 an Act of the Legislature, subject to change by the 
 Legislature. It knew that Fourth Avenue might 
 some day be opened as a public street ; it also 
 know that it might not be opened. It was at lib- 
 erty to recognize what the subsequent years have 
 made so clear, that the north and south Avenues 
 were laid out too far aiuirt; that the Commis- 
 sioners were not alive to the advantage of ]U'o- 
 viding smaller l)locks int(M-sected by alleys 
 for puiweying merchandise and su))plies and re- 
 
79 
 
 moving refuse. It was competent for it to be- 
 lieve that a very different, and more convenient 
 system of streets might be laid out under more 
 intelligent auspices. In the latter event its rail- 
 road might well continue as it had begun, upon 
 its own private right of way. In such a situa- 
 tion can you impute to the Harlem Company a 
 declaration in substance that it recognized Fourth 
 Avenue then merely projected, inchoate, contin- 
 gent, as an open public highway, the title all in 
 the City, the facilities and functions of a public 
 thoroughfare all in existence? Does a mere re- 
 quest for the City’s approval to the location of 
 the railroad upon and along a paper street, carry 
 with it the implied assurance of the Railroad Com- 
 pany that it would forever thereafter recognize an 
 assumed title to the land in the street as vested 
 in the City, in such sense that the grant in its 
 charter to build a railroad must be viewed in tlie 
 same light as the grant of a si^ecial franchise to lay 
 its tracks upon the surface of an opened, graded, 
 regulated and constructed public street? If this 
 be true as a legal proposition, why did the City 
 in the street opening proceeding recognize any 
 title whatever in the Harlem Company? Such 
 title was recognized. The awards though nomi- 
 nal were made, confirmed by the Court and paid. 
 If an estoppel can be created by the solemn and 
 deliberate adjudication of a court of competent 
 jurisdiction, it was created here, but that estop] )el 
 instead of closing the month of the Harlem Com- 
 pany precludes the defendant Tax Commission- 
 ers and the Intervenor from asserting the exist- 
 ence of a special franchise in this case. 
 
 2. Neither the filiuf/ of the floerck map, Inifinfi 
 out the East Jioafl i(pnti the Common Lands of 
 the City of New York, nor the suhseqnent fiimy 
 
80 
 
 of the City map in 1811 pursuant to Chapter 115 
 of the Laws of 1807, ivas a dedication of the lands 
 included within the lines of such paper streets, in 
 such sense as to constitute such strips pnhlic 
 streets within the definition of the tax law regard- 
 ing special franchises. 
 
 It was argued in behalf of the defendants that 
 as the title to the East Road covering the portion 
 of Fourth Avenue as laid out on the city map, 
 within the limits of the Common Lands of the City 
 of New York, was vested in the city, and as i)ar- 
 cels of the Common Lands had been sold by the 
 City to private parties abutting on this road, as 
 indicated by the exhibits offered in evidence by 
 the defendants, and as also shown on the Haviland 
 map. Relator’s Exhibit AAA (p. 957), and as cer- 
 tain portions of the bed of Fourth Avenue north- 
 erly of the Common Lands had been ceded for 
 street purposes to the city at the time the charter 
 of the New York and Harlem Railroad Company 
 was granted by the Legislature; therefore, the 
 right given to locate its road, with the consent of 
 the city, in Fourth Avenue was a special fran- 
 chise. 
 
 We think that the adjudged cases fully answer 
 this contention. 
 
 In Matter of Rhinelander (68 N. Y., 105) the 
 City of New York had built a sewer in that portion 
 of 91st Street lying between Second and Fourth 
 Avenues, 91st Street having been laid down on the 
 Commissioners’ map made under the Act of 1807 
 and filed in 1811, and, therefore, answering pre- 
 cisely to llie same description as Fourth Avenue 
 north of the south line of 45th Street. No pro- 
 ceeding to open 91st Street between the limits in- 
 dicated had ])een carried to a com})letion at the 
 time the sewer was constructed and the assess- 
 
81 
 
 ment therefor laid. The Court held that the as- 
 sessment was void. Referring to the city map, 
 Earl, J., says, at p. 107 : 
 
 “But that map was wholly the act of the 
 municipal authorities. Property owners had 
 nothing to do with it. It was made, not to 
 indicate streets actually laid out, but as a 
 plan for future improvements and growth of 
 the city. Future streets, when opened, were 
 expected to be opened as laid out on the map ; 
 and the streets thus indicated could he opened 
 only after dedication by the owners of the 
 land or the regular action of the municipal 
 authorities for that purpose. Hence the fact 
 that this street is indicated on the map has 
 no significance. The fact that the laud on 
 each side of the street has been divided into 
 lots has no significance. This division into 
 lots was made by the municipal authorities 
 for the pur[jose of assessments and not by the 
 owners of the land. A few houses have been 
 built along the line of the street, but in build- 
 ing houses the owners of the land are ex- 
 pected to regard the lines of the street so as 
 not to interfere with the opening of the street, 
 when the time shall come to open it, or with 
 the plan of the city as laid down on the map. 
 It is shown that there has l)een some travel 
 by the public, for many years past, in some 
 portion of the street, between Second and 
 Fourth Avenues. But it is not shown under 
 what circumstances the travel took place, nor 
 the condition of the land in the vicinity of the 
 street. The i)assage by the pul)lic over open, 
 waste, useless land for many years, would 
 furnish but little, if any, evidence of itself 
 that the locus was a str(*et. It matters not 
 that the owner, in dealing with his own ])rop- 
 erty, treated this for some purposes as a 
 
82 
 
 street, because it was laid down upon the city 
 map as a street, and in the growth and im- 
 provement of tlie city was inevdtably some 
 day to become one. 
 
 ***** 
 
 It is therefore clear that the place indi- 
 cated was not a street; that the municipal 
 authorities in constructing the sewer there 
 were trespassers, and that no assessment 
 could be legally laid to pay the expense of 
 such a trespass.” 
 
 In Mott A's. Eno (181 N. Y., 346), Cullen, Cli. J., 
 in discussing the city map, and its origin under 
 the act of 1807, says, page 376: 
 
 “The act of 1807 provided for the establish- 
 ment by the commissioners appointed there- 
 under of a permanent plan for the streets 
 and avenues of the City of New York. It did 
 not operate as a present opening of those 
 streets or a dedication of the land therein to 
 public use, but provided that the municipal 
 authorities might subsequently open streets 
 in accordance with that plan to which plan 
 those authorities were restricted.” (Citing 
 Matter of Rhinelander, 68 N. Y., 105). 
 
 In People ex. rel. Retsof Minina Enmnanv vs. 
 State Board of Tax Commissioners (75 App. Div., 
 131), the A])pellate Division, Third Department, 
 held that the right to lay pipes in a town high- 
 way, granted by the owners of the fee, is not a 
 franchise. This decision was affi)-nied in 179 N. 
 Y., 511, without opinion other than that expressed 
 by the Court, viz. : 
 
 “on the ground that relator’s pro])erty right 
 sought to be taxed herein is not a s])ecial 
 franchise within the meaning of the tax law.” 
 
S3 
 
 In this case the relator had secured the consent 
 and grant of abutting owners in a town highway, 
 the fee of which was vested in such abutting own- 
 ers, to lay its pipes under the surface of such 
 highway. It had not, however, secured any ex- 
 press grant from the State, or other public body 
 to lay such pipes in said highway. In reversing 
 the assessment of the State Board, which had 
 been confirmed by the Court below, Kellogg, J., 
 says at page 133 : 
 
 “The ‘franchise’ here does not mean the 
 right to exercise corporate functions but the 
 right to use the public streets, highways, or 
 public places, either as an individual or cor- 
 poration. The right to so use the public 
 streets, highways or public places is a prop- 
 erty right, and it is because such property has 
 value that the right exists to assess it. The 
 ‘franchise, right authority or permission,’ 
 here mentioned must mean some special privi- 
 lege derived from some governmental body, 
 or some political body, having authority to 
 grant the property rights sought to be taxed. 
 It is this species of proi)erty, intangible in its 
 nature, which the law was enacted to reach. 
 • * • The purpose of the law, 1 think, is 
 
 obvious. Its purpose was to reach and assess 
 those rights in streets, highways and ])ublic 
 places which once ladonged to the laiblic at 
 large, or to political divisions of the State, 
 and wliich had been granted for a term, oi' in 
 y)erpetuity, to individuals or corporate bodies, 
 and if this is the ol)vious ))ur|)ose of tlu^ law 
 it follows that where nothing has been granteil 
 there is nothing for the Itoai’d of Tax Coiti- 
 missioners to assess.’’ 
 
 It is not disyiiited that no yirocecidings were 
 taken to open Hast Road, nor subsequently 
 
84 
 
 Fourth Avenue, East Road being substantially 
 included within the lines of Fourth Avenue, 
 until the proceedings instituted in 1850, nearly 20 
 years after the Harlem Railroad had been in pos- 
 session of its roadbed. 
 
 It is not questioned that the City at all times 
 owned the fee of the so-called East Road, and of 
 the lands adjoining the same on the east, the only 
 plots being sold off being on the west of the East 
 Road, except some plots between 74th and 82nd 
 Streets. The East Road so called ran west of 
 and partly included the 24-foot strip occupied by 
 the New York and Harlem Railroad, its east line 
 being about one foot westerly of the east line of 
 said 24-foot strip. 
 
 Attention was drawn on the argument below 
 by defendants’ counsel to the case (already here- 
 inbefore noticed of Graham vs. Stern (168 N. Y., 
 517). This case grew out of the efforts on the 
 part of the City, and the owners, to accommodate 
 the layout of lots and streets as shown on the old 
 Goerck map of the Common Lands to the layout 
 as shown on the city map filed in 1811. The case 
 recognizes the right of the City to deal with its 
 own land as a ])rivate owner could do, and is au- 
 thority for the pro])osition that in conveying the 
 ])lots bounded by these streets, which subsequently 
 l)ecame portions of tbe streets and avenues laid 
 out on the city map of 1811, the presum))tion is 
 tliat tlie City intended to retain in itself the fee of 
 the land in these streets, and not to convey such 
 fee to the ])urchaser of lots or {dots abutting 
 thereon. 
 
 Y e fail to see that the case has any jnirticular 
 bearing upon the issues iii this controversy, cer- 
 tainly none unfavorable to relator. There is 
 nothiiig in Judge Gray’s o])inion which siqiports 
 
the assertion made by the defendants that the 
 mere filini>: of a map constitutes a public street 
 so that the right thereafter granted to the rail- 
 road comi)any to occupy a pa])er street is a spe- 
 cial franchise within the terms of the tax law. 
 
 In view of this situation, and in view of the fact 
 that these lands were owned by the City in its pri- 
 vate capacity and not as a subordinate branch of 
 the State, it appeared that in addition to the con- 
 sent which the City had given to the occupation of 
 the pai)er street under the tenns of the charter of 
 the New York and Harlem Kailroad Company, a 
 further consent or license, or authority, should be 
 obtained from it for the occupation of lands which 
 it owned in its private capacity. An examination 
 of the authorities of this State on the subject 
 shows very distinctly that the City had rights in 
 these lands which were separate and distinct from 
 its rights and obligations as a subordinate instru- 
 mentality of the State government. 
 
 The leading case upon the distinction between 
 the ])ublic and ])rivate powers of a municijiality 
 appears to be Bailey vs. Mayor, &c., of New York 
 (d Hill, o29) — an action for damages dm* to tb.e 
 negligent construction of a dam. 
 
 Nelson, Ch. J., in the course of his o))inion in 
 this case, said : 
 
 “The argument of the defendants’ counsel 
 confounds the powers in question with those 
 belonging to the defendants in their charac- 
 ter as a municipal or i)ublic duty — such as 
 are granted exclusively for })ublic |)urposes 
 to counties, cities, towns and villages, whei’e 
 the corporations have, if I may so speak, no 
 private estate or interest in the grant. As 
 the powers in question have been conferre*! 
 upon one of these ])ublic cor|)orations, thus 
 blending in a measure those conteired for 
 
86 
 
 private advantage and emolument with those 
 already possessed for public purposes, there 
 is some difficulty I admit in separating them 
 in the mind, and properly distinguishing the 
 one class from the other, so as to distribute 
 the responsibility attaching to the exercise of 
 each. But the distinction is (piite clear and 
 well settled, and the process of separation 
 practicable. To this end regard should be 
 bad, not so much to the nature and character 
 of the various powers conferred, as to the 
 object and }nirpose of the legislature in con- 
 ferring them. If granted for public purposes 
 exclusively, they belong to the corporate body 
 in its public, political or municipal character. 
 But if the grant was for purposes of private 
 advantage and emolument, though the public 
 may derive a common benefit therefrom, the 
 corporation quoad hoc, is to be regarded as 
 a private company. It stands on the same 
 footing as would any individual or body of 
 persons upon whom the like special franchises 
 have been conferred. (Citing authorities.) 
 Suppose the legislature instead of the fran- 
 chise in question had conferred ni)on the de- 
 fendants banking powers, or a charter for a 
 railroad leading into the city, in the usual 
 manner in which such powers are conferred 
 upon private companies; conld it lie doubted 
 that they would hold them in the same char- 
 acter, and be subject to the same duties and 
 liabilities? I cannot doubt but they would. 
 These powers, in the eye of the law, would be 
 entirely distinct and separate from those ap- 
 pertaining to tile defendant as a munici])al 
 body. So far as related to the character thus 
 conferred, they would lie regarded as a pri- 
 vate com])anv an<l be subject to the resiionsi- 
 bilities attaching to that class of institu- 
 tions.” 
 
87 
 
 In the case of Brick Presbyterian Church vs. 
 City of Xeiv York (5 Cowen, 538), an action was 
 brought against the city for an alleged breach of 
 the covenant of quiet enjoyment, contained in the 
 deed from the city to plaiiititf’s predecessors in 
 title. The deed provided that the land should be 
 used for church or cemetery purposes, and subse- 
 quently the city passed an ordinance prohibiting 
 such use of the premises. 
 
 Savage, Ch. J., in this case said : 
 
 “The defendants are a corporation, and in 
 that capacity are authorized bj’ their charter, 
 and by law, to purchase and hold, sell and 
 convey real estate, in the same manner as 
 individuals. They are considered a person 
 in law within the sco^je of their corporate 
 powers; and are subject to the same liabili- 
 ties, and entitled to the same remedies for the 
 molation of contracts, as natural persons. 
 They are also clothed, as well by their char- 
 ter, as by subsequent statutes of the State, 
 with legislative powers; and in the capacity 
 of a local legislature, are particularly 
 charged with the care of the public morals 
 and the public health within their own juris- 
 diction.” 
 
 In Fire Insurance Co. vs. Keeseville (148 N. Y., 
 52), Gray, J., said : 
 
 “The distinction between the public and 
 private powers conferred u))on municipal cor- 
 porations, although the line of demarkation 
 at times may be difficult to ascertain is gen- 
 erally clear enough AVbere we find 
 
 that the power conferred has relation to pub- 
 lic pur[)Oses and is for the ])ublic good, it is 
 to be classified as gover-nmental in its nature! 
 and it ap])ertains to the cor])oi'atioTi in its 
 
88 
 
 particular cliaraoter. Bat when it relates to 
 the accomplishment of ])rivate corporate pur- 
 poses, in which the public is only indirectly 
 concerned, it is private in its nature and the 
 municipal corporation in respect to its exer- 
 cise is regarded as a legal individual.” 
 
 See also Clark vs. Sprague No. 2 (113 App. 
 Div., 645), which was an action to compel defend- 
 ants to take titles tendered by plaintiffs. Title 
 was derived from tax sale of premises for taxes 
 levied by the city, while the city was owner of the 
 premises in question. Held that the city held title 
 as a private owner and was subject to pay taxes 
 thereon. 
 
 Webb vs. Mayor, etc., of N. Y., (64 How. Pr., 
 10), was an action to restrain the defendants from 
 carrying into effect the provisions of Chapter 
 456, Laws of 1881, on the ground that the act was 
 unconstitutional. 
 
 Macomber, J., in the course of his opinion in 
 this case said : 
 
 ‘ ‘ But a more interesting question is pre- 
 sented by the claim made in behalf of plain- 
 tiffs, that the act is unconstitutional because 
 it violates the rights of property of the City 
 of New York. The land which is covered by 
 the reservoir, together with the land west of 
 it known as Eeservoir Square, was granted 
 in fee simi)le to the city by what is known as 
 the Dongan Charter in 1686. That charter is 
 substantially embodied in the Montgomerie 
 Charter, so called, of 1730. The Third Sec- 
 tion of the Dongan Charter is as follows 
 (quoting same) .***** 
 
 “The same power is reiterated and re- 
 stated in the twelfth section and in the four- 
 teenth section. The same rights were re- 
 stated in the thirty-sixth and thirty-seventh 
 
89 
 
 sections of the Montgomerie charter. The 
 last charter was confirmed by the colonial 
 legislature in 1732, and again by the constitu- 
 tions of 1777, of 1821 and of 1846. 
 
 “The lands in question, therefore, are 
 owned by the city in fee simple absolute. This 
 was so held in the case of Furman vs. New 
 York (5 Sand S. C., 16) and in the same case 
 10 N, Y., 567). If therefore the legislature 
 has undertaken by its acts to destroy the 
 property of this cori)oration, or to deprive the 
 city of its use, without just compensation, it 
 has violated a fundamental law of the state.” 
 
 Towle vs. Remsen (70 N. Y., 302), was an action 
 of ejectment to recover possession of certain lands 
 under water of the City of New York, being part 
 of the tideway. Both parties claimed under 
 grants from the city. Miller, J., in the course of 
 his opinion said, at page 308 : 
 
 “We j)ass then to a consideration of the 
 question arising under the grant of the City 
 of New York to the heirs of Mark Clark in 
 1827, under whom the defendants claim title. 
 The land under water originally belonged to 
 the Crown of Great Britain, and i)assed by 
 the Kevolution to the State of New York. 
 The j)ortion between high and low water 
 mark known as the tideway, was granted to 
 the city by the early charters (l)ongan Char- 
 ter, Secs. 3 and 14; Montgomerie Charter, 
 Sec, 37), and the corporation have an abso- 
 lute fee in the same. (Mott vs. Thayer, 2 
 Bosw., 61). It necessarily follows that the 
 city had a perfect right, when it granted to 
 the devisees of Clarke, to make the grant of 
 their portion of the land in f(,*e simple abso- 
 lute.” 
 
90 
 
 Langdon vs. The Mogur, etc. (93 N. Y., 129), was 
 an action to recover damages sustained by tlie 
 erection of a new wharf in front of plaintiff’s 
 wharf ui)on the Hudson River, cutting off access 
 to plaintiff’s wharf. 
 
 Earl, J., in the course of his opinion in this case 
 said, at page 143 : 
 
 “The city took the fee to the land under 
 water granted to it by the Dongan and Mont- 
 gomerie charters, and the right to build 
 wharves and docks thereon, and to take and 
 have the wharfage accruing therefrom. It 
 could grant the lands to individuals with all 
 the rights and privileges which it possessed; 
 and it did, in fact, prior to 1798, make many 
 such grants. 
 
 ‘Under the act of April 3, 1798, as well as 
 under acts prior thereto, general authority 
 was conferred upon the city to lay out and 
 construct wharves, and the general system 
 seems to have been for the city to convey the 
 land under water to individuals, requiring 
 them to fill up the land and construct the 
 wharves, with the right to receive the wharf- 
 age, which sjvstem was repeatedly recognized 
 by the legislature.” 
 
 In flatter of The Mayor, etc. (18(1 N. Y., 241), 
 the (piestion consi<lered was whether an award in 
 street opening proceedings should be made for 
 land owned by the city and acquired for i)uiq)oses 
 of a pipe line. 
 
 Chase, J., in the course of his oi)inion in this 
 case, said : 
 
 “Real pro])erty is purchased and acquired 
 by municipalities for different iuiri)oses; it is 
 held in fee or otherwise de])endent in ])art 
 upon the authority by which it is purchased 
 
91 
 
 or acquired. The consideration for real prop- 
 erty so purchased or acquired for certain pur- 
 poses is i)aid by taxes levied upon all the tax- 
 able property within the municipality, and 
 for certain other purposes by special assess- 
 ment levied upon the property of individuals 
 and corporations specially and i)ecnliarly 
 benefited by the improvement which requires 
 the acquisition of such real property. The 
 lands of the City of New York in question 
 were acquired in fee simple absolute, and the 
 bonds given to raise the money to pay there- 
 for, if still unpaid, are a general charge 
 against the city.” 
 
 Again at page 244: 
 
 “Persons owning real property abutting 
 upon other real property owned by a munici- 
 pality do not have easements in or over 
 the municipal property simply because the 
 property is owned by a municipality and not 
 by an individual. Real property acquired by 
 a municii)ality for general corporate pur- 
 poses, and not for street or other special i)ur- 
 poses, is held pursuant to the deeds of con- 
 veyance the same as individuals hold real 
 proj^erty. The abutting owners u])on the 
 lands in question j^rior to this proceeding did 
 not have any right of access over the same or 
 right to protect the free circulation of light 
 and air to their property. I’lie maintenance 
 of a [)ul)lic street secures to abutting owners 
 certain rights and easements which consti- 
 tute bcmetits to such abutting owiicis. When 
 lamls are ac(|uired by a municipality and 
 j)aid foi' by special assessment, there is an 
 implied contract that the benefits derived by 
 the payment of such assessment shall be [iro- 
 tected.” 
 
92 
 
 And again at page 245 : 
 
 “Wliere the absolute and unqualified title 
 to land is owned by a municipality it may be 
 used for any of the purposes of such munici- 
 ]iality (Whitney vs. State of New York, 96 
 N. Y., 240 ; Eldridge vs. City of Binghamton, 
 120 id., 309). So far as the City of New York 
 is concerned, it could undoubtedly have de- 
 voted this land to street purposes. As the 
 City owned the property in question in fee 
 
 * simple absolute it could have erected thereon 
 a public building, maintained thereon a pub- 
 lic park or street, or, if the property was not 
 j equired for the purposes of the water sup- 
 ply, it could have been sold and the proceeds 
 of the sale applied to the general purposes of 
 the corporation and to the advantage of the 
 general taxpayer.” 
 
 See also Mount Hope Cemetery vs. City of 
 Boston, 158 Mass., 509. 
 
 We think the legal effect of the consent of the 
 City to occupy lands owned by it in its private ca- 
 pacity, as evidenced by the ordinance approved 
 February 1st, 1832, is similar to the granting of 
 lauds under public waters belonging to the Peo])le 
 of the State of New York by the Land Board. 
 See People ex rel. The Hudson d' Manhattan Rad- 
 icaij Company vs. State Board of Tax Commis- 
 sioners, 203 N. Y., 119. 
 
 Notwithstanding, extraordinary legal effect is 
 (‘laimed as the result of the filing of fhe cify imqi 
 in 1811. AVo have already cifed aufhorities indi- 
 cafing thaf fhe effect of this ma]i was not in anv 
 way, sha])e or manner to ai)iiropriate the streets 
 Ihereon shown for public use, hut merely to indi- 
 cate a idan for the future develo))ment of the city. 
 
93 
 
 Unless the defendants can show that the effect of 
 filing the inaj) in question was to create the public 
 streets thereon shown their attempt to justify the 
 legality of the assessment must fail. 
 
 It is claimed that under Chapter 115 of the Laws 
 of 1807 and under the General Act of 1813, pursu- 
 ant to which and amending legislation Fourth 
 Avenue was opened, there was a provision to the 
 effect that no compensation should be allowed to 
 abutting owners for any improvements which 
 they might make within the lines of the streets, 
 including Fourth Avenue, as laid out on the city 
 map, provided such improvements were placed 
 there subsequent to the filing of the map. 
 
 The learned Appellate Division, while appar- 
 ently recognizing that a natural person might have 
 successfully challenged the constitutionality of 
 such a provision, suggest that the relator is a 
 statutory person and therefore precluded from 
 raising such an objection. Why? 
 
 We has supposed that the construction given by 
 the Federal Supreme Court to the 14th Amend- 
 ment of the Constitution of the United States had 
 set at rest the contention that a corf)oration can- 
 not invoke its i)rotection or that of any other con- 
 stitutional provision with tin* same degix*e of light 
 as an individual. 
 
 See 
 
 Santa Clara Count if vs. So. Pac. Ily. Co., 
 118 U. S., 394; ‘ 
 
 Covington, etc., Turnpike Poarl Co. vs. 
 Sand ford, 1(54 U. S., 578, 592; 
 
 Smyth vs. Ames, lb9 IT. S., 522; 
 
 Lake Shore, etc., Py. Co. vs. Smith, 173 
 U. S., 084, 090. 
 
 The defendants do not question the authority of 
 the case of Forster vs. Scott (130 X. V., 58.3), in 
 
94 
 
 wliicli a similar provision with reference to maps 
 filed showing streets in the Bronx was held uncon- 
 stitutional. The effect of the decision in Forster 
 vs. Scott is attempted to be avoided on the ground 
 that the State constitution in force in 1807, when 
 the act appointing the commissioners to lay out 
 the city into streets was passed, in 1811, when the 
 map was filed, and in 1813, when the general act 
 in regard to opening streets was passed, contained 
 no provision prohibiting the taking of private 
 property for public use except upon payment of 
 just compensation and that such provision did 
 not find a place in the Constitution until 1821 and 
 that the amended Constitution of that year recog- 
 nized the validity of this Act of 1813. 
 
 If, however, we examine the reasons stated by 
 the Court of Appeals in the Forster case for hold- 
 ing Chapter 681 of the Laws of 1886 unconstitu- 
 tional, we find two grounds stated; first, that it 
 deprived the owner of private property without 
 making just compensation, and, second, that it de- 
 prived the owner of his enjoyment and possession 
 without due process of law. 
 
 If, therefore, we find that there was embedded 
 in the State Constitution in force in 1807, 1811 and 
 1813 a due process of law provision it follows that 
 the provision in the Act of 1813 forbidding com- 
 pensation to owners who had made erections upon 
 their lands subsequent to the filing of the mai) is 
 and then was unconstitutional under the authority 
 of Forster vs Scott, which, therefore, plainly and 
 flatly overrules the early cases cited by the de- 
 fendants, ]n-incii)ally Matter of 29th Street (1 
 TTill, 189); Matter of 39/A Street (1 TTill, 191), 
 and particularly Matter of 127/A Street (56 Tlow, 
 Br.. 660). 
 
 The latter is a Special Term opinion by Daniels, 
 
95 
 
 J. One feature of the ease is expressly disap- 
 proved by Cullen, J. (now Chief Justiee of the 
 Court of Appeals), in the Matter of Opening Rog- 
 ers Avenue (29 Abbott’s N. C., 361). 
 
 See also Matter of 116tk Street (1 App. Div., 
 436), in which the rule of damage announced in 
 the Matter of 29th Street and Matter of 39th 
 Street was expressly repudiated. 
 
 Taking up, then, the due process of law provi- 
 sion, its history is traceable from the very begin- 
 nings of the common law. 
 
 The 39th Chapter of the Magna Charta of King 
 John provided that: 
 
 “Xo freeman shall be taken, or imprisoned 
 or disseized or outlawed, or exiled, or in any 
 wise destroyed; nor shall we go upon him, 
 nor send upon him, but by the lawful judg- 
 ment of his peers or by the law of the land.” 
 
 Section XIII. of the Constitution of New York 
 of 1777 provided : 
 
 “And this convention doth further, in the 
 name and by the authority of the good people 
 of this State ordain, detennine ami declare. 
 That no member of this State shall be dis- 
 franchised, or deprived of any rights or priv- 
 ileges secured to the subjects of this State by 
 tliis Constitution, unless by the law of the 
 land, or the judgment of his peers.” 
 
 This was in effect the 39th Chapter of Magna 
 Charta. See Lincoln’s Constitutional History of 
 New York, \'ol. 1, page 522. 
 
 Section 1 of Article \Hr. of the Constitution of 
 New York of 1821 y)rovided : 
 
 “No member of this State shall he dis- 
 franchised or deprived of any of the rights 
 
96 
 
 or privileg’es secured to any citizen thereof 
 unless by tlie law of the land, or the judg- 
 ment of his peers.” 
 
 Article 1 of Section 7 of the Constitution of 
 1821, became Article 1 of Section 1 of the Consti- 
 tution of New York of 1846, and is now Article 1 
 of Section 1 of the present Constitution of 1894. 
 
 Kent’s Commentaries 2, page 13, in discussing 
 the above provision of Magna Charta, says : 
 
 “The Constitution of the United States, 
 and the Constitution of almost every State 
 in this Union contains the same declarations 
 in substance, and nearly in the same lan- 
 guage, and where express constitutional pro- 
 visions on this subject appear to be wanting, 
 the same principles are probably asserted by 
 declaratory legislative acts; and they must 
 be regarded as fundamental doctrines in 
 every State, for the colonies were parties to 
 the national declaration of rights in 1774, in 
 which the trial by jury, and the other rights 
 and liberties of English sul)jects, were per- 
 emptorily claimed as their undoubted inherit- 
 ance and birthright. 
 
 ‘ ‘ It may be received as a proposition 
 throughout this country, that no person can 
 be taken or imprisoned ; or disseized of his 
 freehold or estate ; or condemned; or deprived 
 of life, liberty or property, unless by the law 
 of the land or the judgment of his peers. 
 The words ‘by the law of the land’ as used 
 originally in Magna Charta, in reference to 
 this subject, are understood to mean ‘due 
 process of law,’ that is, by indictment or pre- 
 sentment of good and lawfnl men; and this 
 says Lord Coke is the true sense and ex])o- 
 sitioji of those words. The better and larger 
 definition of dne process of law is, that it 
 
97 
 
 means law in its regular course of adminis- 
 tration through courts of justice.” 
 
 In Bank of Columbia vs. Oakley, 4 AVheaton, at 
 page 242, Jackson, J., in discussing the meaning 
 of the law of the land, said: 
 
 “As to the words from Magna Charta in- 
 corporated into the Constitution of Maryland, 
 after volumes spoken and written with a view 
 to their exposition, the good sense of man- 
 kind has at length settled down to this, that 
 they were intended to secure the individual 
 from the arbitrary exercise of the powers of 
 government, unrestrained by the established 
 principles of private rights and distribution 
 of justice.” 
 
 The advance made in this country over that of 
 Great Britain in construing the limitation placed 
 by “law of the land” upon constituted authority 
 is discussed in Hurtado vs. California, 110 U. 8., 
 at page 531, where Matthews, J., says: 
 
 “The concessions of Magna Charter were 
 wrung from the King as guarantees against 
 the oppressions and usurpations of his pre- 
 rogative. It did not enter into the minds of 
 the barons to provide security against their 
 own body, or in favor of the Commons by 
 limiting the power of Parliament; so that 
 hills of attainder, ex post facto laws, laws 
 declaring forfeitures of estates and other 
 arbitrary acts of legislation, which occur so 
 frefjuently in English history, were never ixh 
 garded as inconsistent with the law of the 
 land; for notwithstanding what was at- 
 tributed to Lord Coke in Ponham’s ease, H 
 Rep., 115, 118, a the onini|)otence of Parlia- 
 ment over the Common Law was absolute, 
 even against connnf)n right and reason. 4’lie 
 
98 
 
 actual and practical security for English lil)- 
 erty against legislative tyranny was the 
 power of a free public opinion represented 
 by the Commons. 
 
 ‘ ‘ In this country written constitutions were 
 deemed essential to protect the rights and 
 liberties of the people against the encroach- 
 ments of power delegated to their govern- 
 ments, and the provisions of Magna Charta 
 were incorporated into Bills of Rights. They 
 were limitations upon all the powers of gov- 
 ernment, legislative as well as executive and 
 judicial. 
 
 “It necessarily happened, therefore, that 
 as these broad and general maxims of lil)erty 
 and justice held in our system a different 
 I)lace and performed a different function 
 from their position and office in English Con- 
 stitutional History and Law, they would re- 
 ceive and justify a corresponding and more 
 comprehensive interpi'etation. Applied in 
 England only as guards against executive 
 usurpation and tyranny, here they have be- 
 come bulwarks also against arbitrary legisla- 
 tion; but in that application as it would be 
 incongruous to measure and restrict them by 
 the ancient Customary English law, they 
 must be held to guarantee not particular 
 forms of procedure, Imt the very sul)stance 
 of individual rights to life, liberty aud prop- 
 erty. ’ ’ 
 
 The meaning of “law of the land” was dis- 
 cussed l)y Bronson, J., in the Matter of John and 
 Cherry Street, 19 Wendell, (157, where he held the 
 xVct of 1818 transferring to the corporation title 
 to the land from which parts of the old street had 
 been withdrawn unconstitutional, saying, in the 
 course of his opinion, after citing Matter of Al- 
 bany Street, 11 Wend., 149: 
 
99 
 
 “ ‘ * * * and such I think is still more 
 
 clearly the meaning when that danse is con- 
 sidered in connection with the preceding one, 
 inhibiting a deprivation of property without 
 due process of law.’ This danse is an en- 
 largement and extension of the words of 
 ^lagna Charta, ch. 29: ‘Xo freeman shall 
 be disseized of his freehold but by the law of 
 the land.’ Those words ‘by the law of the 
 land,’ as said by Coke (2 Inst., 50), are prop- 
 erly rendered ‘due process of law’; among 
 which he mentions the writ original at the 
 common law, the ordinary mode of commenc- 
 ing a suit to tix' the title; &c.’ ” 
 
 Taylor vs. Porter, 4 Hill, 144. 
 
 In this case it was held that a statute authoriz- 
 ing a private road to be laid out over the lands of 
 a person without his consent was unconstitutional 
 and void. 
 
 In this case, we have a judicial construction of 
 the provision in the later constitutions of the 
 State above referred to, where the language used 
 is almost word for word the same as Section Xlll. 
 of the Constitution of 1777. 
 
 Bronson, J., in the course of Ids opinion, said: 
 
 “Under our form of government the legis- 
 lature is not supreme. It is only one of llie 
 organs of that al)Solule sovereignty which i-e- 
 sides in the whole body of the peo[)le. Like 
 other departments of the governnnmt, it eaii 
 ordy exercise sneh powers as have l)een dele- 
 gated to it; and when it steps beyond tliat 
 boundary, its acts, like those of the most 
 humble magistrate in the State who ti-an- 
 scends his jurisfliction, are utterly void.’’ 
 
 Again, at page 145: 
 
 “But the question does not necessarily 
 
100 
 
 turn on the section granting legislative 
 power. The people have added negative 
 words, which should put the matter at rest. 
 ‘No member of this State shall be disfran- 
 chised, or deprived of any of the rights or 
 privileges secured to any citizen thereof, nn- 
 less hy the law of the land, or the judgment of 
 his peers.’ (Const., Art. 7, Section 1.) The 
 words ‘by the law of the land’ as here used, 
 do not mean a statute passed for the purpose 
 of working the wrong. That construction 
 would render the restriction absolutely nuga- 
 tory, and turn this part of the constitution 
 into mere nonsense. 
 
 “The people would be made to say to the 
 two houses, ‘You shall he vested with the 
 legislative power of the state;’ hut no one 
 ‘shall he disfranchised or deprived of any of 
 the rights or privileges’ of a citizen, unless 
 you pass a statute for that purpose; in other 
 words, ‘You shall not do the wrong unless 
 yon choose to do it.’ The section was taken 
 with some modifications from a part of the 
 29th Chapter of Magna Charta, which pro- 
 vided, that no freeman should he taken or 
 imprisoned, or he disseized of his freehold, 
 etc., hut by lawful judgment of his peers, or 
 hy the law of the land. Lord Coke, in his 
 commentary upon this statute, says, that 
 these words ‘by the law of land’ mean 
 ‘hy the dne course and process of law,’ 
 which he afterwards explains to he, ‘l)y in- 
 dictment or presentment of good and lawful 
 men, where such deeds lie done in dne manner, 
 or hy writ original of the Common Law’ (2 
 Inst., 45, 50). In North Carolina and Tennes- 
 see, where they have copied almost literally 
 this part of the 29th Chapter of Afagna Char- 
 ta, the terms ‘law of the land’ have received 
 the same constrnction. (Citing authorities.) 
 The meaning of tlie section then seems to lie 
 
101 
 
 that no member of the state shall be disfran- 
 chised, or deprived of any of his rights or 
 privileges, unless the matter shall be adjudged 
 against him upon trial had according to the 
 course of the Common Law. It must be ascer- 
 tained judicially that he has forfeited his 
 I)rivileges, or that some one else has a su- 
 perior title to the ijroperty he possesses be- 
 fore either of them can be taken from him. 
 It cannot be done by mere legislation.” 
 
 The opinion then goes on to discuss the prohi- 
 bitions contained in other clauses of the Constitu- 
 tion. 
 
 Green vs. Shumway, 39 N. Y., 426. 
 
 In this case, we have again a judicial construc- 
 tion of Section 1 of Article 1 of the Constitution 
 of 1846, which, as seen above, is almost word for 
 word from the Constitution of 1777. 
 
 The question related to the validity of the 
 statute reciuiring the taking of an oath by electors 
 of delegates to a constitutional convention. 
 
 The Court said, in the course of its opinion : 
 
 “The statute also violates Section 1 of 
 Article 1 of the Constitution of this State, 
 whicli declares that ‘no member of this State 
 shall be disfranchised or deprived of any of 
 the right or privileges secured to anj' citizens 
 thereof, unless by the law of the land or the 
 judgment of his peers.’ The ‘law of tin? land’ 
 does not mean a statute passed for the j)ur- 
 jjose of working the wrong; but the law wliieh 
 e.xisted at the time when the alleged offense 
 was perpetrated. The provision was intendecl 
 to restrict the powers of the legislature and 
 to prevent any act which wouhl deprive a 
 party of bis rights or disfranchise him until 
 
102 
 
 it was ascertained judicially that they had 
 been forfeited. (Citing authorities.) The 
 act in question pronounces a judgment and 
 disfranchises the electors without judge or 
 jury or any of the forms required hy the 
 ordinary course of legal proceedings.” 
 
 White vs. White, 5 Barbour, 474. 
 
 In this case Section 1 of Article 1 of the Con- 
 stitution of 1846 again received judicial construc- 
 tion. 
 
 Held that the Act of April 7th, 1848, for the 
 more effectual protection of the property of mar- 
 ried women, so far as it relates to existing rights 
 of property in married persons, was unconstitu- 
 tional and void. 
 
 Mason, J., in the course of his opinion, said : 
 
 “This Section 1 of Article 1 of the present 
 constitution is but a copy of Section 1 of 
 Article 7 of the former constitution of the 
 state, and has received judicial construction. 
 The question arose in the case of Taylor vs. 
 Porter and Ford (4 Hill, 140), as to the valid- 
 ity of a general statute of the state authoriz- 
 ing private roads to be laid out over the lands 
 of others, for the use of the applicant, his 
 heirs and assigns, and the act of the legisla- 
 ture was adjudged to he unconstitutional, as 
 coming in conflict with this section of the con- 
 stitution. We must, therefore, regard this 
 section of the Constitution as having received 
 judicial construction.” 
 
 Bowe vs. United States Eeflector Com- 
 ])any, 86 Hun, 407. 
 
 Action to obtain a judgment declaring the plain- 
 tiff, as late sheriff, to hav(' a li(‘n on (*ertain ])er- 
 sonal property. 
 
1C3 
 
 Daniels, J., in the course of liis opinion, said : 
 
 “Upon this subject care has been -taken to 
 preserve and protect the rights of the owners 
 of property against interference of this de- 
 scription, even though that may have been 
 provided for by an act of the legislature. To 
 prevent such interference it has been declared 
 that: ‘No member of this state shall be dis- 
 franchised or deprived of any of the rights 
 or privileges secured to the citizens thereof 
 unless by the law of the land or the judgment 
 of his peers.’ ‘Nor be deprived of life, lib- 
 erty or property without due process of law,’ 
 and these provisions have been so construed 
 as to maintain the rights of property against 
 mere legislative interference, and as requiring 
 a legal proceeding following other ordinary 
 forms of law and resulting in a judgment upon 
 some obligation or contract or liability in- 
 curred by the party proceeded against, liefore 
 he can be divested of his property, and it can 
 be applied to the uses of another party. They 
 protect the owner against the taking of his 
 property by color of legislative authority, to 
 bestow it upon or give or devote it to the 
 uses of another person. This was generally 
 considered in Xpav York £ Oswego R. R. Co. 
 vs. Van Horne (b7 N. Y., 473). Ami it was 
 held by the Court that the Tjcgislature never 
 can take the property of one individuai with- 
 out his consent and give it to another, ami 
 this salutaiw general principle has also been 
 maintained in Eni})ury vs. Connor (3 Comst., 
 511-517); Taylor vs. Porier (4 Hill, 141); 
 Weismer vs. Donylas (54 N. Y., 01, 105).” 
 
 Westervelt vs. Cregg, ll2 N. Y., 202. 
 
 Question relat(*d to the right of a husband to a 
 legacy to his wife not vested in possession at tlie 
 time of the taking effect of tlie Act of 1H48. 
 
104 
 
 The clause of the Constitution discussed was 
 that: “No person should be deprived of life, 
 liberty or property without due process of lawC’ 
 
 Denio, J., in the course of his concurring 
 opinion, said : 
 
 “The act does not fall within the meaning 
 of due process of law. That tenn according 
 to Lord Coke means being brought in to 
 answer, according to the ‘old law of the land’ 
 (2 Inst., 50; and see also Taylor vs. Porter, 
 4 Hill, 140, and cases cited hy Bronson, J., 2 
 Kent’s Com., 13). 
 
 ‘ ‘ The provision was designed to protect the 
 citizen against all mere acts of power, whether 
 flowing from the legislative or executive 
 branches of government. It does not, of 
 course, touch the right of the state to appro- 
 priate private property to public use upon 
 making due compensation, which is fully rec- 
 ognized in another part of the constitution; 
 hut no power in the state can legally confer 
 upon one person or class of persons the prop- 
 erty of another person or class, wdthout their 
 consent, whatever motives of policy may exist 
 in favor of such transfer.” 
 
 Forster vs. Scott, 136 N. Y., at p. 583. 
 
 Action for specific performance under contract 
 of sale. The encumbrance on account of which 
 title was rejected was a map filed pursuant to 
 Chapter 681 of the Laws of 1886 by City of New 
 York, entirely covering plaintiff’s lot, no action 
 to acquire title having been taken. The act pro- 
 vided that no compensation should he allowed for 
 any building erected su])sequent to the filing of 
 the map. 
 
 O’Brien, J., in the course of his o])inion dis- 
 
105 
 
 cussing the provisions against erections subse- 
 quent to the filing of the map, said : 
 
 “This statute is of somewhat ancient origin 
 and it was said in some of the cases that it 
 was at first enacted at the solicitation of the 
 lando'^^^lers in order to enhance the value of 
 their property. {In re Furman Street, 17 
 Wend., 658; in re Wall Street, 17 Barb., 639; 
 Seaman vs. Hicks, 8 Paige, 660). 
 
 “However that may be in the aspect in 
 which the question is now presented, we think 
 it is in conflict with the provisions of the Con- 
 stitution for the protection and security of 
 private property. The constitutional guaran- 
 tee against the appropriation of private prop- 
 erty for public use, except upon just com- 
 pensation, as well as that against depriving 
 the owner of its enjoyment and possession 
 without due process of law, have been the 
 subject of much judicial discussion in the 
 manifold aspects in which the questions have 
 been presented in the numerous cases. These 
 provisions have been so thoroughly ex- 
 pounded, and their application, meaning and 
 practical scope so minutely explained that it 
 would be very difficult to suggest now any 
 views which could be called new, and a re- 
 statement of propositions, so often before 
 sanctioned by courts and judicial writers, is 
 quite needless. This case is governed by a 
 few principles so well settled and understood, 
 that they are elementary, and imthing can be 
 added to their force or application by illus- 
 tration or extended discussion. The validity 
 of a law is to be determined by its purpos(‘ 
 and its reasonable aiul practieal effect and 
 operation though enacted under the guise of 
 some general power, which the l(‘gislature 
 may lawfully exercise, but which may be and 
 frequently is userl in such a maimer as to eii 
 
106 
 
 croach, by design or otherwise, upon the posi- 
 tive restraints of the Constitution. What 
 the legislature cannot do directly it cannot 
 do indirectly, as the Constitution guards as 
 effectually against insidious approaches as 
 an open and direct attack. When a law de- 
 prives the owner of the beneficial use and 
 free enjoyment of his property, or imposes 
 restraints upon such use and enjoyment, that 
 materially affect its value, without legal 
 process or compensation, it deprives him of 
 his property within the meaning the Constitu- 
 tion. All that is beneficial in property arises 
 from its use and the fruits of that use, and 
 whatever deprives a person of them deprives 
 him of all that is desirable or valuable in the 
 title and possession. It is not necessary, in 
 order to render a statute obnoxious to the 
 restraints of the Constitution that it must in 
 terms or in effect authorize an actual physical 
 taking of the property or the thing itself, so 
 long as it affects its free use and enjoyment, 
 or the power of disposition at the will of the 
 owner. ’ ’ 
 
 The above case has been followed in Matter of 
 Mayor, 24 App. Div., 7; German Real Estate Co. 
 vs. Myers, 32 App. Div., 41; Sinyer vs. Mayor, 47 
 App. Div., 42; N. T. C. II. R. R. Co. vs. Ilaffen, 
 DU Him, 260; In Matter of City of New York, 196 
 N. Y., 255. 
 
 In the last case cited the principle of Forster vs. 
 Scott was approved ; but the Court held that good 
 faith should be exercised l)y the parties affected 
 by the intervening time during the pendency of 
 the street o])ening proceedings and where a build- 
 ing had been planted upon i)remises to be taken, 
 for the sole i)ur])ose of increasing the damages, 
 such a building slionld be treated as personal 
 property. 
 
107 
 
 Chicago, etc., R. R. Co. vs. Chicago, 166 
 U. S., 226. 
 
 In a proceeding to condemn certain property of 
 the Railroad Company the sum of one dollar was 
 fixed as just compensation for the })roperty taken. 
 The contention of the Railroad Com])any was that 
 it had been deprived of its i)roperty without due 
 process of law contrary to the prohibitions of the 
 14th Amendment. 
 
 In this particular case it was held that the award 
 was not improper on the ground that a railroad 
 having laid its tracks within the limits of the 
 city must be deemed to have done so sul)ject to 
 the condition — not, it is true, expressed, but neces- 
 sarily implied — that new streets of the city might 
 be opened and extended from time to time across 
 its tracks as the public convenience required, and 
 under such restrictions as might be prescribed 
 by statute. 
 
 Harlan, J., in his opinion discussed fully the 
 question whether “due process of law” requires 
 compensation, holding that it did, saying in the 
 course of his opinion : 
 
 “It is proper now to inquire whether the 
 due process of law enjoined by the Four- 
 teenth Amendment recpiires compensation to 
 be made or adef|uately secured to the owner 
 of private property taken for [)ublic use under 
 the authority of a State. 
 
 “In Davidson vs. Neiv Orleans, above cited, 
 it was said that a statute declaring in terms, 
 without more, that the fidl and exclusive title 
 to a described piece of land belonging to om; 
 j)erson should be and is hereby vested in 
 another person, would, if efTeetual, deprive* 
 the former of bis j)ro[)erty wit bout dm; 
 process of law, within the meaning of tin* 
 
108 
 
 Fonrteentli Amendment. See also, Missouri 
 Pacific Railway vs. Nehraska, 164 U. S., 403, 
 417. Snell an enactment wonld not receive 
 judicial sanction in any country having a writ- 
 ten constitution distributing the powers of 
 government among three co-ordinate depart- 
 ments, and committing to the judiciary, ex- 
 pressly or by implication, authority to en- 
 force the provisions of such constitution. It 
 would he treated not as an exertion of legis- 
 lative power but as a sentence — an act — of 
 s])oliation. Due ])rotection of the rights of 
 property has been regarded as a vital prin- 
 ciple of republican institutions. ‘Next in de- 
 gree to the right of personal liberty,’ Mr. 
 Broom, in his work on Constitutional Law, 
 says, ‘is that of enjoying private property 
 without undue interference or molestation’ (p. 
 228). The requirement that the property shall 
 not be taken for i)ublic use without just com- 
 l)ensation is but ‘an affirmance of a great doc- 
 trine established by the common law for the 
 l)rotection of private property. It is founded 
 in natural equity, and is laid down by jurists 
 as a principle of universal law. Indeed, in a 
 free government almost all other rights 
 would become worthless if the government 
 possessed an uncontrollable power over the 
 private fortune of every citizen.’ 2 Story 
 Const., § 1790 ; 1 Bl. Com., 138, 139 ; Cooley’s 
 Const. Lim., 559; People vs. Platt, 17 Johns., 
 195, 215; Bradshaw vs. Dodgers, 20 Johns., 
 103, 106; Petition of Mt. 'Washington Road 
 Co., 35 N. IL, 134, 142; Parham vs. The Jus- 
 tices, etc., 9 Georgia, 341, 348; Martin et al., 
 Ex parte 13 Arkansas, 198, 206 et seq.; John- 
 son vs. Rankin, 70 N. C., 550, 555. 
 
 “But if, as tliis court has adjudged a legis- 
 lative enactment assuming aiLitrarily to take 
 the property of one individual and give it to 
 
109 
 
 another individual, would not he due process 
 of law as enjoined by the Fourteenth Amend- 
 ment, it must be that the requirement of due 
 process of law in that amendment is applica- 
 ble to the direct appropriation by the State 
 to public use and without compensation of the 
 y)rivate property of the citizen. The lei?isla- 
 ture may prescribe a form of y)rocedure to be 
 observed in the taking of private property 
 for public use, but it is not due process of law 
 if provision be not made for com])ensation. 
 Notice to the owner to appear in some judicial 
 tribunal and show cause why his property 
 shall not be taken for public use without com- 
 pensation would be a mockerj' of justice. Due 
 process of law as applied to judicial proceed- 
 ings instituted for the taking of private prop- 
 erty for public use means, therefore, such 
 process as recognizes the rigl^t of the owner 
 to be compensated if his property be wrested 
 from him and transferred to the public. The 
 mere form of the proceeding instituted 
 against the owner, even if he be admitted to 
 defend, cannot convert the process used ijito 
 due process of law, if the necessary result 
 be to deprive him of his property without 
 compensation. ” 
 
 Tho Justice then proceeds to cite Fletcher vs. 
 Peck, G Cranch, 87 ; Loan Associatioji vs. Topeka, 
 20 Wall, 055; Gardnei- vs. Xewbui-gh, 2 Jolms 
 Ch., 102; Sinnickson vs. Johnson, 17 X. J. L., 129; 
 Searl vs. School District, 155 F. S., 555; Scotf vs. 
 Toledo, 50 Fed. Kep., 585; Mount Hope* (cemetery 
 vs. Boston, 158 Mass., 509, and then said: 
 
 “In his work on Constitutional Limitations, 
 Mr. Cooley says: ‘The f)rinci})les, then, uiiori 
 which the process is based are to determine 
 whether it is ‘due process’ or Jiot, and not any 
 
110 
 
 considerations of mere form * * * When 
 the government, throngh its established 
 agencies, interferes with tlie title to one’s 
 property, or with his independent enjoyment 
 of it, and its action is called in question as not 
 in accordance with the law of the land, we are 
 to test its validity by those principles of civil 
 lil)erty and constitutional protection which 
 have become established in our system of 
 laws, and not generally by rules that pertain 
 to forms of procedures merely. In judicial 
 proceedings the law of the land requires a 
 hearing before condemnation, and judgment 
 before dispossession; but when property is 
 appropriated by the government to public 
 uses, or the legislature interferes to give di- 
 rection to its title through remedial statutes, 
 different considerations from those which re- 
 gard the controversies l)etween man and man 
 must prev'hil, different proceedings are re- 
 quired, and we have only to see whether the 
 interference can be justified by the estal)lished 
 rules applicable to the special case. Due 
 process of law in each particular case means 
 such an exertion of the powers of government 
 as the settled maxims of law permit and sanc- 
 tion, and under such safeguards for the pro- 
 tection of individual rights, as those maxims 
 ])rescribe for the class of cases to which the 
 one in question belongs. * * * Jjj every 
 government there is inherent authority to 
 ai)])ro])riate the i)ro])erty of the citizen for the 
 necessities of the State, and comstitutional 
 provisions do not confer the power, though 
 they generally surround it with safeguards 
 to prevent abuse. The restraints are, that 
 when si)e(‘ific ])ro])erty is taken, a pecuniary 
 com))ensation, agreed u))on or det(‘rniined bv 
 judicial inquiry, must l)e ])aid (pp. *356, 
 *357). In his discussion as to tin* meaning 
 
Ill 
 
 and scope of the Fourteenth Amendment the 
 same Nvriter in his edition of Story on the 
 Constitution, after observing that every 
 species of individual property was subject to 
 be appropriated for the special needs of 
 either the State or national government, l)ut 
 that the power to appropriate was subject to 
 the restriction, among others, that it must not 
 be exercised without making due compensa- 
 tion for whatever is taken, says : Due process 
 of law requires, first, the legislative act 
 authorizing the appropriation, pointing out 
 how it may be made and how the compensa- 
 tion shall be assessed; and, second, that the 
 parties or officers proceeding to make the 
 appropriation shall keep within the authority 
 conferred, and observe every regulation 
 which the act makes for the protection or in 
 the interest of the property owner, except as 
 he may see fit voluntarily to waive them (2 
 Stor>' Const., § 1956). 
 
 “In our opinion, a judgment of a state 
 court, even if it be authorized l)y statute, 
 whereby private property is taken for the 
 State or under its direction for public use, 
 without compensation made or secured to the 
 owner, is, upon principle and authority, want- 
 ing in the due process of law required by the 
 Fourteenth Amendment of the Constitution 
 of the United States, and the affirmance of 
 such judgment by the highest court of the 
 State is a denial by that State of a right 
 secured to the owner by that instrument.” 
 
 Gardner, vs. Village of Newburgh, 2 
 Johns., Ch., 164. 
 
 An act of the legislature authorized the trustees 
 of a village to supply it with water by means of 
 conduits, etc., but made no provision foi' indemni- 
 fying the owners of lands through which the 
 
112 
 
 stream flowed. Held an injunction should be 
 granted. 
 
 Kent, Chancellor, in the course of his opinion, 
 said : 
 
 “I have intimated that the statute does not 
 deprive the plaintiff of the use of the stream, 
 until recompense be made. He would be en- 
 titled to his action at law for the interruption 
 of his right, and all his remedies at law, and 
 in this court remain equally in force. But I 
 am not to be understood as denying a com- 
 petent power in the legislature to take private 
 property for necessary or useful purposes; 
 and perhaps even for the purpose specified 
 in the acts on which this case arises. But to 
 render the exercise of the power valid, a fair 
 compensation must, in all cases, be previously 
 made to the individuals affected, under some 
 equitable assessment to be provided by law. 
 This is a necessary qualification accompany- 
 ing the exercise of legislative powers, in 
 taking private property for public uses; the 
 limitation is admitted by the soundest author- 
 ities and is adopted by all temperate and 
 civilized governments, from a deep and uni- 
 versal sense of its justice.” 
 
 Further in the course of his opinion he quotes 
 tlie provision of the United States Constitution: 
 “that private ])roperty shall not be taken for pub- 
 lic use, without just compensation” as l)inding 
 upon him. 
 
 It is now settled by authority, however, that 
 the first ten amendments of the Constitution, in 
 one of which was the clause in question, were 
 limitations upon the powers of the Federal Cov- 
 ernment rather than upon the State Governments. 
 
113 
 
 See Jackson ex dem Wood vs. Wood, 2 
 Cowen, 819. 
 
 Spies vs. Illinois, 123 U. S., 131, 166. 
 
 Bradshaw vs. Rogers, 20 Johns., 103. 
 
 Action for trespass in relation to entry upon 
 lands in connection with construction of canal 
 under Act of 1817. 
 
 Spencer, Ch. J., said in the course of his 
 ojhnion : 
 
 “If we could surmount this difficulty, a 
 more serious one presents itself. The act 
 under consideration contains no provision to 
 compensate, at any time, those whose lands 
 may he taken as a substitute for a public road 
 or highway, altered or discontinued by Ibc 
 principal engineer for the damages they sus- 
 tain. This is directly opposed to tie fifth 
 article of the Amendments of the Constitu- 
 tion of tlie United States, which forbids the 
 taking of property for public use without just 
 compensation. The same inhibition to tlie 
 power of the legislature is contained in the 
 late amendments to the Constitution of thii 
 state. I do not rely on either as having a 
 binding constitutional force upon the act 
 under consideration. Tlie former related to 
 the powers of the national government, arnl 
 was intended as a restraint on that govern- 
 ment; and the latter is not yet operative. But 
 they are both declaratory of a great and fund- 
 amental principle of government; and any 
 law violating that principle must be di'emerl 
 a nullity, as it is against natural right and 
 justice. This all-imjiortant and essential 
 Itrinciple was somewliat illnstrat(‘<l. in tlm 
 case of The People vs. Platt (17 .lolins Re))., 
 215).’’ 
 
Bradshaw vs. Rogers was reversed in 20 Johns., 
 735, but the Court said upon the question of com- 
 pensation, p. 745: 
 
 “This equitable and constitutional title to 
 compensation, undoubtedly, imposes it as an 
 absolute duty upon the legislature to make 
 provision for compensation whenever they 
 authorize an interference with private rights. 
 Perhaps, in certain cases, the exercise of the 
 power might be judicially restrained, until 
 an opportunity was given to the party in- 
 jured to seek and obtain the compensation. 
 But it would deserve a very grave considera- 
 tion before we undertook to lay down the 
 broad proposition, that notwithstanding a 
 statute clearly and expressly directed the as- 
 sumption of private property for a necessary 
 public object, it would still be a nullity, and 
 the officer who undertook to execute it a tres- 
 passer, if a provision for compensation did 
 not constitute part and parcel of the act itself. 
 However, it is not necessary to give any 
 opinion on this point, for, as I have already 
 observed, the provision for compensation in 
 the Act of 1817 extended to cases arising 
 under the Act of 1820.” 
 
 Coming to the cases relied on by defendants : 
 
 Matter of 127th Street, 56 Howard’s 
 Practice, 60. 
 
 Held that the provision of the act of 1813, 
 prohibiting the commissioners from making allow- 
 ance for liuildings erected sul)se(iuent to the filing 
 of the map was not unconstitutional. 
 
 The ground for the decision a])i)ears to be as 
 stated at i)age 64: 
 
 “The land devoted to the street did remain 
 in the owner until it was actually appro- 
 
115 
 
 priated by legal proceedings to the use of the 
 public as a street and ])roper compeusatiou 
 was provided for it. But before that it had 
 been affected l)y a valid law at the time when 
 it was enacted, depriving the owner of com- 
 pensation for buildings afterwards placed 
 upon it. At that time the legislative author- 
 ity was unrestricted and undoubted in this 
 respect, and the act was within the acknowl- 
 edged and proper scope of legislative author- 
 ity; and it was enacted to meet what was 
 then believed to be the wants and to provide 
 for the protection of the public interests in 
 what it was then believed would soon become 
 a large and important commercial city. Its 
 object was to make suitable provisions for its 
 future enlargement and expansion; and the 
 policy of it, while it was not prejudicial to 
 the property owners, was not unreasonably 
 generous to the pul)lic. It declared and de- 
 fined the prospective rights and interests of 
 both ; for it defined the property which the 
 owners could securely improve, and that 
 which the public should afterwards use. The 
 future rights of both were at once estahlislu'd, 
 and its policy became interwoven with the 
 future growth of the city. It took effect at 
 once, and to that extent, and when there was 
 no obstacle in the way of its enactment, it 
 affected the property subject to its [U'ovisioiis. 
 'I'o that extent it became an executed law 
 when no constitutional impediment whatevei- 
 could be snpfiosed to stand in its way.” 
 
 Matter of Furman St., 17 M'endell, fiol. 
 
 Street i)rocee<lings to op<,*n a street in IH.'kj laid 
 out a map of commissioners made in IHlt), pur- 
 suant to the charter of the \'illage of Biooklyn <*f 
 1810, and question upon this apjKuil i-elatcd 
 
116 
 
 auiong others to the refusal of the Commissioners 
 to allow damages for structures erected subse- 
 quently to the filing of the map. 
 
 Upon the question of the constitutionality of 
 the act, the Court said that the prohibition upon 
 taking property for public use without compensa- 
 tion was not contained in the constitution at the 
 time the act was passed, and if the land was in 
 fact appropriated in 1819, there was nothing in 
 the constitution to forbid such a course. 
 
 I’he Court further said (p. 659) : 
 
 “But waiving this consideration, the right 
 to take private property for public use is not 
 conferred l.)y the Constitution. It is a right 
 inseparably connected with the sovereign 
 power of the state in whatever hands that 
 power may reside; and the Constitution has 
 only regulated its exercise, by requiring that 
 just compensation be made to the owner. At 
 what time and in what particular manner the 
 owner shall receive his recompense, rests in 
 the discretion of the legislature, with uo other 
 limitation or restriction than that it shall be 
 just compensation. There is nothing in the 
 constitution, nothing in the natural equity or 
 justice of the case, which forbids that this 
 recompense should be made in property in- 
 stead of money, or in any other form which 
 secures to the owner a fair equivalent for the 
 land of which he has been de])rived. It is 
 upon this principle that benefits were s(d off 
 against damages under the Canal Laws, and 
 if the land of a farmer of the value of one 
 hundred or one thousand dollars was taken 
 to construct the work, and the canal when 
 completed would enhance the value of his 
 remaining pro])erty lo au equal or greater 
 amount, no other compensation was made to 
 
117 
 
 him. A similar provision has been made in 
 many other statutes. It is the only jnst and 
 reasonable ride on the subject, a ditferent one 
 would tax the public for the benefit of indi- 
 viduals. What then is the case of these ap- 
 pellants? They have had the nninterrujited 
 enjoyment of their land down to the present 
 time; and now when it is to be taken from 
 them they are to receive a just compensation. 
 A prospective appropriation of the property 
 to the public use was made in 1819; but the 
 land was not then taken nor were the owners 
 deprived of any privilege whatever, in rela- 
 tion to its beneficial enjoyment, save that of 
 reciuiring pajunent for any buildings . which 
 they might erect on the site of the streets 
 before the time arrived for opening them. 
 Admitting that this privilege could not be 
 taken from them without a reasonable recom- 
 pense, it cannot be doubted for a moment that 
 they have received this recompense, and that, 
 too, many times over, etc.” 
 
 In the Matter of Widening Wall Street, 
 17 Barb., 617. 
 
 Widening of Wall Street in ISbl, jnirsuant to a 
 resolution of that year, t^uestion related to fiay- 
 ment of damages for building erected subserpumt 
 to passage of resolution. 
 
 Held (Head Note) •' “The act whieli 
 authorized the laying out of the upf)er paii of 
 the city, and the opening of streets there, and 
 prohibited compensation to those who should 
 build on the site of the streets then laid out 
 (2 K. L. of 1813, p. 414), also authorized tin* 
 eorporation to extend, eidarge or othen\*ise 
 improve any street in the lower f)art of the 
 city, but imposed no rest I’iet ion on the right 
 of the owners in that section to receive com- 
 
118 
 
 peiisatioii for their Imildings at whatever 
 time erected. This, by implication, leaves to 
 the owners in the lower i)ortion of the city the 
 general right to improve their lands, when 
 and as they please, nntil such lands shall he 
 finally occupied by the public.” 
 
 In the opinion, Roosevelt, J., discussed the pro- 
 vision of the act of 1813, and seems to have been 
 of the opinion that it was constitutional. 
 
 Matter of Opening Rogers Avenue, 29 
 Al)bott’s New Cases, 361. 
 
 Provision of Act of 1869 affecting certain lands 
 in Flatbnsh that no compensation should be made 
 to owners of premises erecting structures upon 
 the portions thereof shown upon map to he made 
 pursuant to said act held unconstitutional. Cullen, 
 J., writing the opinion. 
 
 In the course of his opinion he said that the 
 'Matter of 127tJi, Street was doubtless well decided 
 if it considered the Act of 1813, and filing the map 
 thereunder worked a limited appropriation of the 
 land as of that time. 
 
 Seaman vs. Hicks, 8 Paige Ch., 655. 
 
 The Chancellor in this case discussing Matter 
 of Furman Street after saying that where the 
 circumstances were such that the immediate loca- 
 tion of streets, according to a settled plan, would 
 he of more actual benefit to the owner of tlu' resi- 
 due of such laud than the ])resent use of that part 
 of the laud thus a])])ro])riated, the intention of the 
 legislature may have he(m to deprive the owner 
 of com))ensation for buildings ('reeled, hut further 
 ha id : 
 
119 
 
 “I think, however, the position cannot he 
 maintained, that where an individual has a 
 single vacant lot, in a city or village, which 
 lot is of great value for building purposes 
 and worth little or nothing for any other use, 
 the legislature may authorize the corporation 
 to appropriate such lot prospectively, to be 
 opened and used as a street at its unimproved 
 value, and to be paid for at some future period 
 when the corporation shall think proper to 
 order such street to be opened; thereby de- 
 priving the owner of the whole beneficial use 
 of his lot, for an indefinite time, without any 
 equivalent whatever for the damage he must 
 sustain in consequence of being deprived of 
 the power of building upon or otherwise im- 
 proving the lot. * * * And as my decision 
 in this case depends upon another or rather a 
 different (juestion, it is not necessary that I 
 should express any definite opinion,” etc. 
 
 It appears that woven into the Constitution of 
 1777 is the guaranty that no citizen shall be de- 
 prived of his rights except “by the law of the 
 land,” which means “due process of law”; that 
 the guaranty in the Constitution of 1777 has been 
 included in about identical language in all the 
 Constitutions of the State since that ti)ne; and 
 that saifl guaranty as contained in the later Con- 
 stitutions has been construed as applicable to 
 property as well as to personal rights. 
 
 It also apjjears that “due process of law,” as 
 construed by the courts of our own State and of 
 the United States, is a guaranty against the taking 
 of property for public use without just coiTipeii- 
 sation, and that prohibitions against erections of 
 buildings similar to that containcfl in tli(> act of 
 1S1‘> have been behl a taking of propei ty. 
 
120 
 
 It also appears that, long before the Coiistitn- 
 tioii of 1821, the courts of this State and text 
 writers recognized the principle as one of the 
 fundamental principles upon which our govern- 
 ment was founded, that private property could 
 not he taken for public use without compensation. 
 
 Under these circumstances it would seem that 
 the decision in Matter of Furman Street (17 
 Wench, 651), doul)ted, as authority in its own day, 
 as we see in 8 Paige’s Chancery, and the decision 
 in the Matter of 127th Street^ must l^e considered 
 as out of line in the jurisprudence of this State, 
 as a departure from the legal precedents exist- 
 ing at the time of their rendition, and overruled 
 in fact by the construction of “due process of 
 law” contained in Forster vs. Scott and the otlier 
 cases following that decision cited above. 
 
 We think the foregoing discussion disposes of 
 the proposition that there was any constitutional 
 force in the provision of the act of 1813 denying 
 property owners compensation for any erections 
 thereafter placed upon lands covered by these 
 paper streets. However, assuming there is any 
 force in the contention of the defendants that this 
 provision of the act of 1813 was at the time valid, 
 how does that justify the conclusion that the filing 
 of a map in 1811 was in legal effect the appropria- 
 tion of land for street purposes in such a sense as 
 to constitute Fourth Avenue for its entire leiiglh 
 a legally opened public street, at the time tlie 
 charter of the New York and Harlem Railroad 
 (^om])any was granted? No adjudicated case has 
 been found which sustains any snch extraordinarx^ 
 claim. The decisions are the other way. Ever\' 
 action on the part of the city in taking proceedings 
 under the act of 181.3 to o])en streets showii on the 
 
121 
 
 city map is an admission that the filing of the map 
 did not constitute these strips of laud public 
 streets, or impress them with any trust, however 
 shadowy, for public purposes. As frequently said 
 by the courts, it was simply a map which was to 
 guide the city in making future developments. 
 
 When, therefore, the city gave its consent, as 
 required by the charter of the New York and 
 Harlem Railroad Company, to the occupation of 
 this unopened street, it was simply complying vdth 
 one of the conditions upon which the general grant 
 was made to the Railroad Company. It was in no 
 possible sense the grant of a special franchise 
 within the meaning and intent of the tax law. The 
 right to occupy this unopened street was a general 
 franchise granted by the Legislature subject to 
 the city’s consent, and when that consent was 
 obtained the condition was satisfied, and the grant 
 of the general franchise became vested. 
 
 It is argued that because the city under the 
 resolution approved February 1, 1832, gave per- 
 mission to the railroad company to occupy lands 
 owned by it for the purpose of its railroad, the 
 railroad company could not possibly secure title 
 ))y adverse possession as against the city. Whether 
 that be true or not with reference to tbe common 
 lands, and the lands ceded for street purposes, thf* 
 city’s consent had absolutely notbing to do with 
 lands owned by private parties, such as the infant 
 Benson, Margaret IMcOown, Archibald Watt, and 
 others, and as to such lands the occupation of tbe 
 railroad company was adv^erse, and under claim 
 of title conferred by existing rleeds produced and 
 received in evidence in this case. There is no 
 question here of a lost deed, nor are presr-riplive 
 rights involved. Whether or not tbe company 
 could hold adversely against tbe city as to lands 
 
122 
 
 owned by the city and covered by its consent, the 
 fact remains that after over 20 years of actual 
 occupation of such lands, the rights of the railroad 
 company were recognized in the most solemn man- 
 ner possible by the street opening proceedings, 
 and awards made which recognized one part of 
 the company’s title as good as another tlirougliont 
 the entire stretch from 45th Street to the Harlem 
 River. How can the State or the City after the 
 lapse of nearly sixty years question the binding 
 force of this adjudication? 
 
 Some loose expressions in some of the opinions 
 rendered in the Park Avenue viaduct litigation, 
 such as in the Birrell case (41 App. Div., 54(5), in 
 the Pape ease (74 App. Div., 175), and in tlie 
 Caldivell case (111 App. Div., 164), refer to the 
 right left in the company, after the street opening 
 proceedings were consummated, as being a “fran- 
 chise.” Of course it was a franchise. The com- 
 pany got a general franchise from tlie Legislature 
 and the city did not disturb, and had not the 
 power to disturl), the Railroad Company in the 
 exercise of that franchise. But is it seriously 
 claimed that these judicial expressions used in 
 discussing questions wholly foreign to the present 
 subject, are to be contorted into adjudications, 
 that the right thus left in the Harlem Company 
 is a special franchise within the meaning of the 
 tax law? 
 
 The learned counsel for the defendants u])on 
 the trial of this case before the Referee went into 
 a very elaborate analysis of the deeds obtained 
 by the Railroad Company from private owjiei's 
 for portions of its right of way, which no oiu' 
 has ever claimed was vested ])rior to the stre('t 
 opening proceedings in the City of New York in 
 its ])rivate ca])acity or otherwise. Attention was 
 
123 
 
 drawn to the apparent fact that in some cases 
 a deed which the railroad company secured was 
 from a former owner who had at tlie time of 
 executing the grant to the railroad company by 
 previous instruments to private parties divested 
 himself of title to the bed of Park Avenue, as in 
 the case of the strip of land assumed to be ac- 
 quired from Dudley Selden, or from Peter Poillon. 
 Assuming all this to be true, how does the failure 
 of the New York and Harlem Railroad Company 
 to secure absolute and indefeasible title from the 
 private owners owning it operate to constitute a 
 special franchise, and taxable as such, in the lands 
 title to which was thus defective! 
 
 The result of a holding that the assessment as 
 to the original 24-foot strip, containing the two 
 tracks, is illegal is to vitiate the whole assessment , 
 ichether or not the two outer tracks laid under 
 authority of Chapter 702 of the Latvs of 1872 he 
 considered as constituting a special franchise, the 
 assessment being a unit and inseparable. 
 
 Upon the summing up of this case before the 
 Referee the learned counsel for defendants was 
 asked what the result would be of a holding that 
 no s[)ecial franchise existed under the terms of 
 the tax law as to the original central strip 24 feet 
 in width, containing the two central tracks, but 
 that grant of the right, under chapter 702 of the 
 laws of 1872, to lay two additional tracks exterior 
 to the 24-foot strip was ))Ossibly a special fran- 
 chise, and his reply was, that the assessment ccnii- 
 plaine’d of, in such evmit, would not be illegal, but 
 merely excessive, because the central strip con- 
 taining the two middle tracks, and exempt from 
 the assertion of ariy special franchise, was used in 
 connection with the two exterior tracks. 
 
124 
 
 The logic of this position forced him to make 
 the fnrtlier claim that if the Tax C'ommissioners 
 had assessed the entire terminal at 42nd Street 
 as a part of the alleged franchise in Park Avenue, 
 such assessment would not be void, but merely 
 excessive. Such a position if sound would justify 
 the Tax Commissioners in assessing in this alleged 
 special franchise the entire railroad to Buffalo 
 as being property used in connection ivith the 
 special franchise. 
 
 It seems hardly necessary to pursue this ab- 
 surdity seriously. The State Board of Tax Com- 
 missioners has no authority whatever to assess 
 any property except as that authority is expressly 
 conferred by statute, and that authority is clearly 
 confined by the statute to assessing special fran- 
 chises, and the physical property in the streets 
 covered by such franchises. The language is : 
 
 “A special franchise shall be deemed to 
 include the value of the tangible property of 
 a person, co-partnership, association or cor- 
 poration situated in, upon, under or above any 
 street, highway, public place or public waters, 
 in connection with the special franchise. The 
 tangible property so included shall be taxed 
 as a part of the special franchise.” 
 
 The railroad in the central portion of Park 
 Avenue 24 feet in width is not the occupation of a 
 street, highway, or pul)lic place, within the terms 
 of the act, because such occupation antedates the 
 existence of the street. Therefore, the property 
 of the railroad company in the central 24-foot 
 strip is in i)recisely the same category legally as 
 file property it owns from 42nd Street to 50th 
 Street between the blocks, and which is used in 
 connectimi with its raili’oad business. Tlie right 
 to assess the one class of ])ro])(‘rty in connection 
 
125 
 
 with the alleged special franchise as to the two 
 exterior tracks is no greater in the one case than 
 in the other. Xo one has ever suggested, nntil 
 counsel for defendants was driven to it by the 
 exigencies of his position, that the Board of Tax 
 Commissioners could include the Grand Central 
 Station in the assessment of the alleged special 
 franchise in Park Avenue. Any attempt to do so 
 would render the assessment manifestly void, and 
 as we have shown in this ease, such property has 
 always been assessed, and is now assessed, by the 
 local tax board. 
 
 It has been repeatedly held that where portions 
 of an indivisible assessment are illegal and void, 
 the whole assessment is illegal and void. 
 
 The precise question came before Senator Els- 
 berg as Referee in People ex rel. Harlem liiver d 
 Port Chester Railroad Company vs. State Board 
 of Tax Commissioners, reported. 
 
 Laiv Journal, April 24, 1909. 
 
 The report of tlie Referee holding the asses- 
 ment void was confirmed by the Special Teiin, 
 Mr. Justice Betts, sitting, and no ap]>eal has been 
 taken l)y the defendants or the intervening munici- 
 pality from that determination. 
 
 In the Port Chester Railroad case the railroad 
 comj)any was assessed for the siqjposed special 
 franchise involved in the ci-ossing of two ],nblie 
 highways in the Borough of the Bronx; one of 
 them, known as Hast lo2nd Sti-eet, was opened 
 and existed as a public street prior to the building 
 of the railroad, and the other, known as the Bronx 
 & Pelham Ihirkway, ha<l been opened subse(pi(‘nl 
 to the building of the railroad and aci'oss tln^ 
 tracks thereof. It was held that lU) special I’ran- 
 chise existed with reference to the highway which 
 
126 
 
 was created subsequent to the building of the 
 railroad, and that as but one assessment for both 
 crossings had been made, and no means were 
 afforded for separating the invalid from the valid 
 portions of the assessment, the whole was void 
 and subject to canceUation. Senator Elsberg says 
 in the course of his opinion : 
 
 “Here, on the other hand, the fee of the 
 lands described as being laid out for the 
 Bronx and Pelham Parkway was only to vest 
 in the city upon the final confirmation by the 
 Supreme Court of the report of the commis- 
 sioners appointed to condemn, and the amend- 
 ment of 1888, in my opinion, affected the 
 property to be taken, that is to say, the prop- 
 erty laid out for the parkway, l)y excluding 
 the relator’s property therefrom. There is 
 at least some confirmation of this opinion in 
 the report of the commissioners of condemna- 
 tion and in the approval by the Supreme 
 Court of that report. And it might be added 
 that this conclusion in no way conflicts with 
 the objects of the legislation under which the 
 assessment in question is claimed to have 
 been made. 
 
 “The franchise Tax Law was enacted in 
 pursuance of a wise public policy and to meet 
 the just demand that grants of the privilege 
 to occupy public highways should, as valuable 
 property rights, be subjected to the taxing 
 power of the State. The beneficent })urpose 
 of the law can l)e accom])lished without strain- 
 ing its meaning in the effort to apply it to a 
 situation which it was never intended to cover. 
 A railroad constructed long befoi’e a highway 
 is laid out to cross it and expressly exempted 
 from being taken as part of the highway, 
 cannot be said to be ojierated at such crossing 
 on the theory of a grant that was never made. 
 
127 
 
 Xor can its maintenance at such crossing be 
 claimed to be either by virtue of an ‘ease- 
 ment over lauds of the city’ — when the city 
 never acquired the lands, as shown by the 
 report of the commissioners of condemnation 
 and the confirmation by the Supreme Court of 
 that report — or by virtue of any public ease- 
 ment whatever, when no public easement ever 
 was created. The suggestion that the exemp- 
 tion contained in the Act of 1888 itself con- 
 stitutes the ‘permission’ to ‘maintain and 
 operate’ mentioned in the statute, ignores the 
 fact that quoad the exemption there is no 
 ‘street,’ ‘highway’ or ‘public place’ within 
 the meaning of the statute. In my opinion, 
 the assessment against the relator, in so far 
 as respects the Bronx and Pelham Parkway 
 crossing, was not authorized ])y the law and 
 is invalid. 
 
 “The objections of the relator to the assess- 
 ment reviewed being not sustained as to the 
 East One Hundred and Thirty-second Street 
 crossing and sustained as to the Bronx and 
 Pelham Parkway crossing, there is still left 
 to consider whether the entire assessment 
 should be vacated, or whether a correction of 
 the assessment or a reassessment should be 
 ordered. The State Board of Tax Commis- 
 sioners did not separate the assessment as 
 between the two alleged special franchises 
 assessed, and it has been held that whei(‘ a 
 tax or assessment sought to be enforced 
 against a pro|>erty owner ‘is made up of dif- 
 ferent items or elements all blended together, 
 some of which are illegal and others legal, he 
 may resist the payment of the whole in tin; 
 absence of some statute which modifies the 
 general rule ( Poth vs. The Mayor, lol N. Y., 
 lb, 10). It has also been held that under the 
 
128 
 
 Tax Law the court can order a reassessment 
 or correct an assessment only in case where 
 it is ‘erroneous’ or ‘unequal,’ and that an 
 assessment can be said to be erroneous only 
 in the case of an overvaluation; that where 
 the assessment is illegal the statute author- 
 izes no relief, except that of striking it from 
 the roll {People ex rel. Garden City Co. vs. 
 Valentine, 5 App. Div., 520). It follows that 
 the assessment under review in the present 
 case should be vacated and set aside.” 
 
 [There was no appeal from an order con- 
 firming the Referee’s report entered January 
 7, 1908.] 
 
 The learned Referee in his opinion endeavored 
 to distinguish the case decided by Senator Els- 
 berg on the ground that in the case of the Bronx 
 k Pelham Parkway street opening the land occu- 
 pied by the railroad was excepted and was not 
 included in the condemnation, whereas in the 
 ease of Park Avenue the land of the railroad com- 
 pany was included. The decision of the Court of 
 Appeals in the Butfalo special franchise case (203 
 N. Y., 107, destroys the validity of this distinction. 
 Equally vain seems the attempt of counsel for de- 
 fendants to justify the legality of this assessment 
 by the assertion that chapter 702 of the Laws of 
 1872, and cha])ter 339 of the Laws of 1892, 
 which authorized, and directed the inq)rove- 
 ments which have been described, consti- 
 tuted a conferment of an entirely new fran- 
 chise ui)on the railroad company, thcrehy 
 ])ringing the case within the terms of the tax- 
 law. The act of 1872 was an exi)ress recognition 
 of the superiority of the rights of the railroad 
 company over the rights of the city; an express 
 recognition that the railroad com]>any’s rights in 
 
Park Avenue to maintain its railroad were as in- 
 defeasible as the rights of the city to use the por- 
 tions of Park Avenue not occupied by the railroad 
 for street purposes, and the intent of the act was 
 to separate those two functions, street use and 
 railroad use. 
 
 The act of 1892 made no enlargement of the 
 rights of the railroad company. It compelled the 
 latter solely in the interest of improving Park 
 Avenue as a street to abandon a perfectly ade- 
 quate and satisfactory structure and use in its 
 stead an expensive steel viaduct of no greater 
 capacity but much more costly to maintain. 
 
 If our contentions under this Point are sus- 
 tained the entire assessment falls as illegal, and 
 further discussion would be unnecessary^. We are, 
 however, presenting all the questions in this case 
 (recognizing the limitations in the jurisdiction of 
 this Court imposed by a unanimous affirmance 
 below) not heretofore disposed of by the decisions 
 of the courts. 
 
130 
 
 SECOND POINT. 
 
 The State Board of Tax Commissioners 
 having adopted the theory of earnings in 
 determining the intangible element in 
 special franchise assessments generally in 
 New York County, their assessment of the 
 intangible element in the alleged special 
 franchise in Park Avenue should be tested 
 by the application of that theory. Re- 
 lator’s findings on this subject were 
 erroneously refused. 
 
 In this case we are constrained to discuss the 
 l)roposition above stated under the limitations 
 imijosed by the unanimous affirmance by the A])- 
 })ellate Division. We do not, however, under- 
 stand that discussion is foreclosed if there are 
 tindings in the record which raise the question. 
 In People ex rel Brooklyn Heights Railroad Com- 
 pany, etc., V. State Board of Tax Commissioners, 
 there was a unanimous affirmance of the finding 
 by the Special Term that the intangible element 
 was of no value. The City, Intervenor, appealed. 
 This Court said, 204 N. Y. Advance Sheets No. 
 585, page 93 : 
 
 “Order affirmed with costs on the ground 
 that the state of the record before us pre- 
 cludes this Court from considering the ob- 
 jections raised by the appellant, the A])])el- 
 late Division having unanimously affirmed 
 the order of the Special Term and the Find- 
 ings of Fact made by it, and the appellant 
 having presented to the Trial Court no re- 
 quest to find by which the questions it now 
 seeks to raise ivould he presented.” (Italics 
 ours). 
 

 In the case at bar findings were proposed and 
 refused. 
 
 See Relator’s proposed findings, Xos. 21, 
 22, 23, 25, 2(i and 27 (Fols. 1872 to 1877, 1879 
 to 1881), refused to which excei)tions were 
 taken (fols. 2287 to 2289). 
 
 There was no conclusion made by the Referee 
 or the Court to the effect that the Relator had 
 not sustained the burden of proof of showing that 
 the assessment made by the State Board was ex- 
 cessive. The Referee or the Court at Special 
 Term simply took the figure of $10,192,000, Avhich 
 was the assessment made by the State Board, 
 and equalized it by taking G7% thereof and fixed 
 . that “as the assessment of the special franchise 
 in Park Avenue of the Relator for the year 1900“ 
 (fob 1826). Taking this in connection with the 
 Finding of Fact that the fair cost of reproducing 
 the existing railroad structures, existing on the 
 second Monday of January, 1900, in Park Avenue 
 from 45th Street to a point near 133rd Street, 
 pro])er deductions by reason of wear and tear and 
 the deterioration of time having been made, was 
 the sum of $4,889,300 (fols. 1656-1657), with lh(‘ 
 further finding (fols. 1673 to 1674) that the final 
 assessment of $10,192,000 for the year 1900, fixed 
 by the State Board of Tax Commissioners, was 
 the sum of the amounts found l)y them to i-(‘])i'e- 
 sent the amounts of the tangil)le property and 
 the intangible element, respectively, it is evident 
 that the f’ourt lias found as the full value of tin* 
 intangible element in this franchise, tlie sum of 
 $5,292,700. Due exccfition to the conclusion of 
 the Special Tenn tliat the ass(‘ssment at full 
 value was $10,192,000 was taken by tin* Relator 
 (fob 2285). 
 
132 
 
 The question of law which the Relator desires 
 to review here is whether its method of showing 
 how the intangible element should he valued on 
 the earnings’ basis is or is not correct. The 
 learned Appellate Division in its opinion did not 
 point out any definite basis upon which the in- 
 tangible element in the alleged special franchise 
 could or should he valued, and, as the record left 
 that court, it is impossible for the Relator now 
 or hereafter to review any assessment by the 
 State Board, no matter how evidently an irre- 
 sponsible guess and no matter how enormous 
 that assessment might he. The writ of certiorari, 
 under such circumstances, is purely illusory. 
 
 In view of the consistent manner in which the 
 courts have aiqfiied the net or gross earnings 
 theory to the valuation of the intangible element 
 in special franchises and in numerous decisions 
 have set forth the elements of debit and credit, 
 we submit that Relator is entitled to some basis 
 on which it can test an assessment of this kind. 
 We cannot for a moment assume that the courts 
 will ultimately recognize an unassailable arln- 
 trary power on the part of the Tax Commission- 
 ers to set any figure they please and then deny 
 the aggrieved party any practical method of re- 
 view. When the case last above cited {People ex 
 re] BrooMpn Heights Pailroad Co., etc., v. State 
 Board of Tax Commissioners) was before the 
 Appellate Division (146 A]q). Div., 373), Kellogg, 
 J., said at page 373 : 
 
 “The object of an assessment is not neces- 
 sarily to ])roduce a tax upon the intangible 
 rights, l)ut is to determine what a special 
 franchise is worth, and, if the basis of com- 
 putation is right, it is quite immaterial for 
 the i)nrpose of fairness whether a tax on the 
 intangible i)art of a fi'anchise results or not. 
 
1 oo 
 
 loo 
 
 If there is no value there is no tax. The as- 
 sessing l)oard and the courts cannot torture 
 facts and conditions to produce a tax — a tax 
 follows a fair and just valuation.” 
 
 With the foregoing by way of preliminary, ve 
 i)eg to place before the Court the discussion on 
 tliis subject which was submitted to the learned 
 Appellate Division. 
 
 In assessing any special franchise which falls 
 within the definition of the tax law there are two, 
 and but two, elements to consider: 
 
 (1) . The value of the intangible property 
 owned by the relator, or its lessor, as the case may 
 be; and 
 
 (2) . The value of the intangible right of the 
 relator to have, maintain, use and operate its 
 tangible property in the public street, highway 
 or place involved. 
 
 These two s}jecies of property it seems cannot 
 be separated, or considered apart one from the 
 other, but for purposes of taxation they can l)e, 
 and should be, separately appraised. These ap- 
 praisals of the two elements must proceed upon 
 entirely distinct bases; as to the first element, 
 that of the tangible propeidy, the method is well- 
 settled and of practically universal application, 
 namely, the tangible i)roperty is to bo valued at 
 not to exceed its cost of repi’oduction less d('i)r(>- 
 ciation from time, wear and tear. With i-eferenc(' 
 to the valuation of the intangible element, tin* 
 Legislature laid down no special rule. Tin* Court 
 of Appeals has said in People ex rel. J<i)H(ii(<i 
 Water Supphj Cowpanp vs. State Poard of Tax 
 Comwissioners (Ibfi X. Y., 39), that in tin* absenc(> 
 of any sj)ecific method of valuation f)rescribed by 
 the I^egislature, the courts were not compelled to 
 
134 
 
 select some one particular method and insist upon 
 its application to all cases. The gist of the Court 
 of Apijeal’s decision in the Jamaica Water Sup- 
 ply Company case is that the Board of Tax Com- 
 missioners ought to adopt some method, ought to 
 disclose the method adopted in its return to the 
 Avrit of certiorari where its assessment is under 
 review, and ought to return the facts upon which 
 it applied its theory of valuation, so that an intel- 
 ligent review thereof could be made by the courts, 
 first, to see if the theory adopted was a proper 
 one, and, second, to see that such theory of valua- 
 tion, if proper, was fairly and justly applied to 
 the ascertained facts in the case. 
 
 In most minds the only rational or logical the- 
 ory of valuing the intangible element is that de- 
 rived from the earnings of such franchise. This 
 is often spoken of as the “net earnings theory.” 
 While the net earnings theory seems the natural 
 and logical one to take in certainly the vast ma- 
 jority of special franchises Avhich are to be as- 
 sessed for taxation, and was the theory ado])ted 
 by the Special Term in the Jamaica Water Sup- 
 ply Company case, and ai)[)roved by the Court of 
 A])peals, it is conceivable that the gross earnings 
 of a special franchise, with proi)er regard to the 
 question whether after paying reasonable operat- 
 ing expenses, there is any suri)lus left, may also 
 be taken as the basis of valuation. We have the 
 testimony of the defendant Tax Commissioners 
 that such was the course ado])ted by them with 
 reference to valuing s])ecial franchises in the City 
 of New York (fol. 417), but that in the present 
 case, having no facts before them on which to 
 ])redicate a findiiig of what the gross earnings, 
 or the net earnings, might be of this poidion of 
 the tracks of the New York and TTarlem Railroad, 
 
]35 
 
 they simply assumed that the intangible element 
 was equal to the value of the tangible- property, 
 and the sum of these two items without doubt 
 makes up the assessment of the special franchise 
 (fols. 411, 423). 
 
 Major Priest testified (fob 408) that upon the 
 tangible property of the alleged special franchise 
 the commissioners placed a valuation of substan- 
 tially $5,000,000. The testimony of the relator’s 
 witness, Mr. W. F]. Hoyt, is that in his judgment 
 the value of the tangible i)roperty on the second 
 Monday of January, 1900, was the sum of $4,889,- 
 300 (fol. 305). The Court below found that this 
 figure represented the value of the tangible prop- 
 erty in (question (fol. 1C56). This estimate in- 
 cludes all of the proi)erty which the Court of Ap- 
 peals in People ex rel. The New York and Harlem 
 Pailroad Company vs. Board of Tax Commission- 
 ers (101 N. Y., 322), held was subject to local 
 assessment, and this figure is only about $100,000 
 less than the api)raisal put upon said property 
 by the State Board of Tax Commissioners. 
 
 Mr. Hoyt’s estiniate is l)ased, first of all, upon 
 a very thorough physical examination of the 
 structures, and a survey thereof, with observa- 
 tions as minute as possible of the condition of 
 the structure, and the effect, so far as visible, of 
 time, and wear and tear. It is not assumed, of 
 course, that the tunnel structure erected under the 
 act of 1872 is as strong and enduring as it was 
 when com[)leted in 1875. Some depreciation rei)re- 
 sented by f)erc(>ntage is allowed. At the same 
 time, it is true that in some res])ects it would cost 
 more to-day to build the tunnel than it did when 
 it was erected by reason of the greater cost of 
 labor and material. Figuring uj)on the ]»resent 
 value of labor and material of tlie kind which has 
 entered into the construction of this railroad 
 
136 
 
 structure the ])reseut cost of reproducing same is 
 worked out, and then a sum is deducted based 
 upon a regular percentage for depreciation. 
 
 Mr. Hoyt’s testimony is briefly given on direct 
 examination, but the same was the summary of a 
 vei’}^ elaborate investigation and study covering a 
 number of 3 *ears. The difficulty of cross-examin- 
 ing this witness without a very thorough investi- 
 gation of the data taken and the method of treat- 
 ing it, was recognized, and amplest opportunity 
 given to the defendants^ through their expert, to 
 investigate Mr. Hoyt’s data and methods. This 
 was done with the result that Mr. Hoyt’s estimate 
 was not questioned and absolutely no evidence 
 was given by the defendants on the subject. Mr. 
 Hoyt’s testimony, therefore, stands uncontra- 
 dicted and unchallenged. The finding of the 
 Court seems to place the matter beyond further 
 controversy. 
 
 We come now to the consideration of the in- 
 tangible element and take np first the data before 
 the Commissioners when they made their ap- 
 praisal which is in the sum of $5,192,000, which 
 figure last named is derived by substracting 
 $5,000,000, the value of the tangible property 
 as found by the Tax Commissioners from their 
 total assessment of $10,192,000. 
 
 An examination of the rei)ort of the New York 
 and Harlem Railroad Comi)any to the State 
 Board of Tax Commissioners of the State of New 
 York, for the year ending June 30, 1899, in evi- 
 dence (A])pendix, p. 836, fob 2506), indicates that 
 it was made out on blanks furnished by the Com- 
 missioners with various schedules from A to N 
 inclusive, calling for s])ecific information in nu- 
 merous details. The blank form treats the rail- 
 road as if it were an oi)erating company, and as 
 
137 
 
 if its entire line were subject to the franchise tax 
 law. The fact of the case is that the New York 
 and Harlem Railroad is not an operating com- 
 pany, and has not been for some years. Its rail- 
 road proi)erties are divided into two distinct 
 classes, which two classes of road are separately 
 leased. 
 
 The so-called “steam line,” extending from the 
 Grand Central Terminal to Chatham, with 
 branches to Lake !Maho])ac and Port Morris, is 
 leased in its entirety to The New York Central 
 and Hudson River Railroad Company, the re- 
 lator herein (See lease in evidence. Exhibit X, 
 Appendix, p. 789, fob 2365). The term of this 
 lease is for 401 years from April 1, 1873, and the 
 rental reserved from the entire steam line, being 
 the interest on the bonds, and dividends on the 
 stock, is $1,640,000.00 (See Schedule J of said 
 report, p. 856). 
 
 The so-called “surface line,” the lower termi- 
 nus of which is at Broadway and Park Row, and 
 the upper terminus at ^ladison Avenue near the 
 Harlem River, is leased to the Metropolitan 
 Street Railway (-oinpany for $350,000, j)lus $2,500 
 for corporate expenses, per annum. 
 
 The total income, which might be called the 
 earnings of the road, including interest accrued 
 on installments of rental, for the year ending 
 June 30, 1899, was $2,045,248.58 (Schedule G, p. 
 855). 
 
 When a railroad is leased, as was (he steam 
 line of the New York and Harlem Railroad Com- 
 pany, the rental reserved represents simply the 
 of)inion of the two f)arties, namely, the lessor and 
 the lessee, of the value of the use of the projierty 
 leased, and while this rental would pi'obably 
 throw some light upon the value of these ))ortions 
 
138 
 
 of the steam line wliieli extends from the south 
 line of 45th Street to a point near 133rd Street, 
 such proportionate tigiire would not in fact rep- 
 resent the actual earnings of that stretch of 
 track. It appears, from Schedule M (p. 860), in 
 said report, that the total miles of railroad in- 
 cluded in the steam line were 135.9. The portion 
 of said railroad which is claimed to constitute a 
 special franchise, namely, from the south line of 
 45th Street to a point near 133rd Street in Park 
 Avenue, is, as shown in the testimony (fol. 338), 
 4.44 miles in length. If we assume a mileage pro- 
 ])ortion based upon the rental received of $1,640,- 
 000 we have a rental of not quite $12,068 per mile., 
 or for the stretch in Park Avenue claimed to con- 
 stitute a special franchise a proportionate rental 
 of $53,581.92. 
 
 If we follow the method of the State Board of 
 Tax Commissioners, and take 5% of that amount 
 and capitalize it by dividing it by the tax rate for 
 the County of New York for the year 1900, to wit, 
 .0224771 (fol. 934), to get at the value of the in- 
 tangible element, we have as re]mesentmg the por- 
 tioji of the income which the Tax Commissioners 
 concluded was proper to pay as the tax on the in- 
 tangible element, $2,679.10; dividing this by the 
 tax rate of the County of New York for the year 
 1900 we have as a quotient $119,192, an amount 
 almost negligible in comparison with the figure 
 of $5,192,000, arrived at by the Tax Commission- 
 ers as the value of the intangible element. 
 
 It seems, however, reasonably apparent, that 
 although the New York and Harlem Railroad 
 Company complied absolutely with the require- 
 ments of the Tax Commissioners, and gave i)re- 
 cisely the information demanded in so far as it 
 was yjossihle to do so, the Tax Commissioners 
 
had nothing before them which indicated the 
 actual earnings of this alleged special franchise; 
 at any rate, they testified to that effect (fol. 410). 
 
 For the purpose of verifying the statements 
 made in the report and to have definite evidence 
 in the record that the so-called “steam line” of 
 the New York and Harlem Eailroad Company 
 was much more extensive than the small segment 
 in Park Avenue, testimony by the company’s en- 
 gineers was adduced and not disputed showing 
 that the measured distance between 45th Street 
 and a point on Park Avenue north of 132nd Street, 
 where the railroad structure crosses the easterly 
 line of the avenue, is 4.44 miles and that on this 
 stretch there are 4 tracks, the length of the four 
 tracks being, of course, 4 times 4.44 (fol. 338). 
 
 The length of the track used under its trackage 
 rights by the New York, New Haven and Hart- 
 ford Eailroad Company is 12.33 to the south line 
 of 45th Street. Including the space between the 
 South line of 45th Street and the stub ends of the 
 tracks in the Grand Central Station, which are 
 on privately owned real estate, the distance is 
 12.43 miles (fols. 350, 377). 
 
 It was further shown that from the south line of 
 45th Street to the Boston & Albany connection at 
 Chatham with the Harlem Eailroad it was 127.34 
 miles. There are 47. GO miles of second track, 
 12.92 miles of third track and 12.44 miles of 
 fourth track between the same points. On the 
 Port Morris Branch there are 1.84 miles of single 
 track; on the Lake ^lahopac Branch 7.22 miles. 
 On the Port Morris Branch there are ()A4 miles 
 of siding and on the Lake Mahoi)ac Branch 1.45 
 miles. The total mileage of all tracks of the Har- 
 lem steam line amounts to 308.57 miles (fols. 3G5 
 to 371). 
 
140 
 
 It tlins appears conclusively that the alleged 
 special franchise is a small segment of the steam 
 railroad proper of the New York and Harlem 
 Railroad. 
 
 As we have already pointed out, the general 
 method of the Tax Commissioners in valuing spe- 
 cial franchises in the City of New York was to 
 take a percentage, not exceeding five, of the gross 
 earnings of a given special franchise, provided 
 there were any net earnings, the amount of the 
 percentage depending upon the extent of the net 
 eaimings, or on evidence showing that if properly 
 managed there would or should be net earnings 
 (fols. 409 to 419), but if the gross earnings were 
 equalled or exceeded by the operating expenses 
 there would be no value to the intangible element 
 (fob 422). 
 
 The Tax Commissioners having neither the 
 gross nor the net earnings of the alleged special 
 franchise in Park Avenue had really no evidence, 
 at least beyond the physical fact that a large 
 traffic daily passed over the railroad tracks in 
 question, and led into an important railroad pas- 
 senger terminal, upon which to fix a value, but 
 simply assumed that the intangible element was 
 at least equal to the value they found for the 
 tangible property. 
 
 The relator has endeavored to present the gross 
 earnings and operating expenses, of this alleged 
 special franchise, and the assessed value of the 
 privately owned real estate not in Park Avenue 
 which is necessarily used in the operation of the 
 alleged special franchise. All the facts are given 
 n})on which either a gross earnings, or net earn- 
 ings, theory of the intangible element can be con- 
 structed. In view of the testimony of the Tax 
 Commissioners as to the method generally fol- 
 lowed by them in assessing special franchises in 
 
141 
 
 Xew York City, we do not think there is any sub- 
 stantial ditlerence between the theory adopted by 
 them and the so-called “net earnings theory” 
 which has been so thoroughly worked out in the 
 Jamaica Water Supply Company case, the Third 
 Avenue Railroad case, the Manhattan Railway 
 Company ease and other cases. 
 
 There might be this difference in the result 
 reached, viz., that if the commissioners took 5 per 
 cent, of the gross earnings of a special franchise 
 which was making substantial net earnings, their 
 assessment would necessarily be larger than they 
 would obtain by taking 5 per cent, of the net earn- 
 ings after making the deductions authorized by 
 the Court of Appeals in the Jamaica Water Sup- 
 ply Company case, and capitalizing it by dividing 
 it by the tax rate for New York County. Upon 
 the figures presented by the relator, whether you 
 apply to the figures the theory of valuation used 
 by the Tax Commissioners, or the net earnings 
 theory, in either case it is demonstrated that the 
 intangible element is without substantial value. 
 
 This brings us to a discussion, deemed ap])ro- 
 ftriate at this point, of the l)asis adopted by the 
 relator in presenting the figures showing the 
 gross earnings and opei’ating expenses. 
 
 It is obvious that the stretch of railroad in 
 question is sinpdy a segment connecting the New 
 York City passenger terminal with other portions 
 of the system, d'his segment of connectiTig track 
 is also used under a trackage agreement l)y the 
 New York, New Haven and Hartford Railroad 
 Comininy, which comi)any us(!S the tracks of the 
 New ^'ork and Harlem Railroad Co)n))any from 
 Woodlawn into the Hi’and Central Tcnniinal, a dis- 
 tance of apin’o.ximately 12.4.') miles, and pays a 
 fixed and ascertained price, derived fi’oni the ele- 
 ments set forth in the trackage agreement 1‘or the 
 privileges enjoyed. 
 
The segment of track itself, separately consid- 
 ered, begins just north of the Grand Central Sta- 
 tion, and terminates at a point where the tracks 
 leave Park Avenue above 132nd Street, crossing 
 private property of the railroad company, and 
 then over the Harlem bridge. There is hut one 
 station on this segment of track, viz., at 125th 
 Street. It is obviously true that no function of 
 the railroad company as a common carrier is com- 
 menced and completed upon this segment of track, 
 or, otherwise expressed, no single i)asseuger, or 
 piece of baggage, or express parcel, or mail pack- 
 age, is transported wholly within the limits of 
 this segment of track, so that the transportation 
 commences and ends within the limits of the seg- 
 ment, bnt each act of transportation covers other 
 portions of an extensive railroad which does not 
 constitute a special franchise. 
 
 Below the south line of 45th Street the tracks 
 are on private property of the company, the bed 
 of Park Avenue having been conveyed by the 
 city to the company under Chapter 919, Laws of 
 1869. 
 
 The analysis of this case is, therefore, attended 
 by a difficulty which does not exist with reference 
 io the ordinary special franchise connected with a 
 street surface line constructed wholly within the 
 limits of a town or city, and wholly upon admit- 
 tedly })ublic streets. 
 
 It is, therefore, a])parent that the alleged spe- 
 cial franchise in Park xVvenue considered by itself 
 yields no earnings at all. Such earnings as can be 
 ])redieated of it must be made in connection with 
 trans])ortation over railroads not constituting a 
 special franchise. Its sole earnings are, there- 
 fore, proi)ortionate, and must be arrived at by 
 calculation. 
 
143 
 
 The learned Referee in his opinion (folio 2192) 
 very frankly recognizes that although the relator 
 complied precisely with the requisition in the way 
 of information made upon it by the Tax Commis- 
 sioners, the information which it supplied did not 
 afford any basis for valuation of the intangible 
 element in the alleged special franchise; that the 
 Tax Commissioners had in fact no relevant in- 
 formation, and that the valuation which they fixed 
 upon the intangible element was in substance a 
 mere haphazard guess. lie further recognizes 
 “that neither the return of the State Board of 
 Tax Commissioners, nor the amended return, con- 
 tains what the Court of Appeals in the Jamaica 
 Water Company case (196 X. Y., 39) said it 
 should contain — it does not tell the Court how the 
 assessing officers got at their valuation — that is, 
 the modus operuudi leading to the result. The 
 effect of this omission is to com[)el the Court to 
 take uj) and fix such valuation de novo. People 
 ex rel Bryan vs Tax Commissioners, N. Y. Law 
 Journal, April 27th, 1910” (fol. 2187). 
 
 He then draws attention to the well-established 
 rule that in all cases of assessment for purposes 
 of taxation it is to be assumed that the valuation 
 of the si)ecial franchise fixed by the State Board 
 is correct, and that the burden of proof rests ui)on 
 the relator who attacks the assessment to show 
 that the method by which the assessors arrived at 
 the result is incorrect, if they had any method, 
 and that the assessment does in fact exceed the 
 fair value of the property assessed. 
 
 With this general statement as to the burden 
 of proof we do not, and cannot, take issue. 
 
 It is, however, we submit, subject to some limi- 
 tation. We thiid< that under the conditions stated 
 a party attacking the assessment may, at least, 
 
I 
 
 144 
 
 make out so good a case priina facie as to shift 
 the burden of proof. 
 
 If the State Board fails to give an intelligent 
 method for fixing the assessment, and if the un- 
 disputed testimony of the members of the Board 
 is that they had no method, then we submit that 
 any theory of estimating the value of the intan- 
 gible rights of the relator, which is presented by 
 the relator, which is intelligent, and is shown with 
 anything approaching a reasonable degree of 
 certainty, is ample and sufficient to overcome the 
 mere presumption of correctness which at most 
 is all that attaches to the act of the State Board 
 in making the valuation. 
 
 A study of the case of People ex rel A. S B. T. 
 Road vs Selkirk (180 N. Y., at ])ages 407 to 410, 
 inc.), will throw a good deal of light upon this 
 l)hase of the discussion. In this case it was dis- 
 closed that the assessing officers had, and showed, 
 no method, or modus operandi, by which the val- 
 uation of $20,000 upon the plank road in question 
 was arrived at, it being conceded that the Plank 
 Boad Company, the relator, had no title whatever 
 in the land comprising the road. 
 
 Judge O’Brien, in a concurring opinion, at 
 ])ages 409-410, uses this significant language: 
 
 “Whatever right the relator had in this 
 highway is not land in any legal or proper 
 sense of the word, and it is wholly incapa- 
 ble of any valuation by any })rineiple of val- 
 uation known to the law. It is impossible to 
 conceive of such a thing as an assessment 
 ui)on land where there is no known rule by 
 which its value can be ascertained. * * * 
 
 If the assessors had assessed this road 
 against the relator for one hundred thousand 
 dollars instead of twenty thousand dollars, 
 the larger assessment would be just as good 
 
145 
 
 as tlie smaller one. How can the relator re- 
 view such an assessment by certiorari? How 
 is the interest assessed, whatever it may be, 
 open to any contest as to valuation? The 
 plain truth is that the relator would be per- 
 fectly helpless and without any remedy, ex- 
 cept the arbitrary discretion of the assessors. 
 They ivould have no more remedy to contest 
 the larger assessment tlmn they have to con- 
 test the present one. They could not call wit- 
 nesses to prove the value of land on the line 
 of this road since that would be no evidence 
 as to the value of the right which it is said the 
 relator has, independent of the fee and of 
 the franchise.” (Italics ours.) 
 
 In the Illinois Central Bailroad ease (27 Illi- 
 nois, 64), the Court says: 
 
 “If the property is devoted to the use for 
 which it was designed and is in a condition 
 to i)roduce its maximum income one very im- 
 l)ortant element for ascertaining its present 
 value is discovered, and that is its net 
 profits. ’ ’ 
 
 Railroads are not luxuries, and they are onl)^ 
 valuable when they have fully demonstrated their 
 power to produce an income to their owners over 
 and above the cost of operation. If the rights of 
 the relator in Park Avenue do not constitute a 
 special franchise, then there is an end to this liti- 
 gation. If they do, then that si)ecial franchise is, 
 within the definition of the franchise tax law, 
 land, and the contention of the relator that in the 
 absence of any evidence, or record, i)roduced by 
 the.se defendants as to how the State P>oard ar- 
 rived at a valuation of over five millions of dol- 
 lars for the intangible, the relator’s uncontra- 
 
14G 
 
 dieted evidence that it made no net earnings and, 
 therefore, the intangible rights have no taxable 
 value, should surely prevail. 
 
 The learned Eeferee, however, is apparently of 
 the opinion that the method adopted by the re- 
 lator of presenting the gross earnings of this 
 stretch of track by giving the mileage proportion 
 of its earnings is not a proper method of getting 
 at the value of the intangible element, notwith- 
 standing that the commissioners themselves tes- 
 tified that their exclusive method in the County 
 of New York was to take a percentage of the 
 gross earnings, not exceeding five, and capitaliz- 
 ing it by dividing it by the tax rate for the year 
 in question, the quotient being the valuation of 
 the intangible element (fob 2192). 
 
 The learned Referee apparently has ignored 
 the well-settled rule that where the property to 
 ])e assessed is a segment of the entire property, 
 the mileage proportion is not only the just and 
 equitable, but the only practicable rule that can 
 be applied. Thus in Cleveland, etc., Ry. Co. vs. 
 Radius (154 U. S., 439) the rule is thus stated 
 (p. 444): 
 
 “Now, when a road runs into two states 
 each state is entitled to consider as within its 
 territorial jurisdiction and subject to the 
 burdens of its taxes what may perhaps not 
 inaccurately be described as the })roportion- 
 ate share of the value flowing from the opera- 
 tion of the entire mileage as a single contin- 
 uous road. It is not bound to enter upon a 
 disintegration of values and attempt to ex- 
 tract from the total value of the entire prop- 
 erty that which would exist if the miles of 
 road within the State were operated sei)a- 
 rately. Take the case of a railroad running 
 
U7 
 
 from Columbus, Ohio, to Indianapolis, Indi- 
 ana. Whatever of value there may be re- 
 sulting from the continuous operation of that 
 road is partly attributable to the portion of 
 the road in Indiana and partly to that in 
 Ohio, and each State has an ecjnal right to 
 reach after a just proi)ortion of that value, 
 and subject it to its taxing processes. The 
 question is, how can equity be secured be- 
 tween the States, and to that a division of 
 the value of the entire property upon the 
 mileage basis is the legitimate answer. Tak- 
 ing a mileage share of that in Indiana is not 
 taxing property outside of the State.” 
 
 It is true that this case and others in the Fed- 
 eral Supreme Court have for the most part had 
 to do with segments of a railroad, or telegraph 
 line, or express company within a particular state, 
 but it is submitted that the principle is the same, 
 whether it be applied to a trunk line extending 
 over several states, or to a railroad extending 
 through many counties of the state, or over many 
 separate taxing districts. 
 
 See also: 
 
 State Railroad Tax Cases, 92 U. S., 575. 
 
 Pittsburg, etc.. It. K. Co. vs. Backus, 
 154 U. S., 421. 
 
 Western Union Telegraph Co. vs. i\Iass., 
 125 U. S., 5.30. 
 
 Pullman Car Conq)anv vs. Pennsvivania, 
 141U. S., 18. 
 
 Adams Fxpress Compaiiy vs. Ohio, 105 
 U. S., 194. 
 
 Fargo vs. Hart, 19.3 U. S., 490. 
 
 See also recent decision in West Shore. Railroad 
 vs. State Roard of Assessors, New Jersey Sn- 
 I>reme Court, June Term, 1911, opinion by 
 Swayze, J. (81 Atlantic Reporter, p. .351). 
 
148 
 
 Tlie learned Referee was of the opinion that 
 the relator should have produced “expert rail- 
 road operators and statisticians who could tell 
 the Court what the value of such a franchise is 
 over and above anythin^ properly chargeable 
 thereto” (fob 2222). 
 
 This suggested course was precisely what the 
 relator attempted to do in the Buffalo Franchise 
 Tax cases. An expert was produced, sworn and 
 qualified to give the value of the alleged franchise 
 right of the railroad company to cross certain 
 public streets in the City of Buffalo. It was easily 
 seen that the proportionate mileage earnings of 
 the brief segment of a railroad which crosses a 
 l)ublic street would certainly be of much less sig- 
 nificance in getting at the value of the intangible 
 element than in the case of Park Avenue, where 
 the occupation is longitudinal and some 4.44 miles 
 in length. If the learned Referee in the case at 
 bar is correct, then the propriety of producing 
 opinion evidence in the Buffalo Franchise Tax 
 cases was much more apparent than in the case 
 at bar. In the Buffalo cases the relator offered 
 to prove before the Referee by experts, whose 
 competency was either not (]uestioned, or was con- 
 ceded, the value of certain of its alleged special 
 franchises. The proof was excluded on the ground 
 that opinion evidence was not com])etent on the 
 question, it being the very question before the 
 Court to be determined by the Court. To which 
 relator’s exceptions were duly taken. (See Vol- 
 ume 2 of the Record in the Buffalo cases, folios 
 235, 244, 2G0, 261, 262, 263, 271, 272.) The relator 
 urged its exception (Brief Point V.) to this ruling 
 unsuccessfully both at S])ecial Term and in this 
 Court, and finally in the Court of A])])eals. Ppo- 
 plc ex rel. V. Y. C. d- II. E. E. E. Co. vs. State 
 
349 
 
 Board of Tax Commissioners (203 X. Y.^ at p. 
 180). 
 
 The Court of Ai)i)eals disposes of this, and 
 other questions argued, other than those dis- 
 cussed in the opinion, with this sweeping state- 
 ment : 
 
 “All of the other contentions of the re- 
 lator, after due consideration, are overruled 
 without discussion.” 
 
 We must assume that the ruling excluding opin- 
 ion evidence of the value of special franchises is 
 correct beyond further disputation. If the 
 learned Referee in the case at bar is right, and 
 it is not possible to show the value of this special 
 franchi.se by its earnings based on the mileage 
 proi)ortion, then indeed the situation of this re- 
 lator is a difficult one. Confessedly, the Tax Com- 
 missioners here followed no method, used no 
 facts, applied no theory, merelj^ “assumed” the 
 value of the intangible element. They might just 
 as well have assumed that the value of this intan- 
 gible element instead of al)out five million, two 
 hundred thousand dollars was fifty-two million 
 dollars, or five hundred and twenty million dol- 
 lars; it would be just as imjiossible for the re- 
 lator, according to the view of the learned Ref- 
 eree, successfully to sustain the burden of proof 
 in attacking such assessment, as in the ea? e at bar. 
 
 We submit that the views of the learned Ai)])el- 
 late Division would a])parently justify the Tax 
 Commissioners to fix any arbitrary assessment, no 
 matter how great the value of the intangible eh*- 
 ment, and by not disclosing the basis of valuation 
 render it al)Solutely im])OSsible for this relator, or 
 any relator similarly situated, to secure a review 
 by the court. Mr. Justice Kellogg says (fol. 
 
 2.V)9o): 
 
150 
 
 “Tlie situation of the road, the condition of 
 the street, the business passing over it, the 
 advantage to the company, the detriment to 
 the public, its particular locality and many 
 circumstances may properly be taken into 
 consideration in determining the value. There 
 is nothing in the record which indicates that 
 the valuation is excessive.” 
 
 If the Tax Commissioners have so broad a char- 
 ter as this, we submit that nothing could be put 
 in any record that would enable the court to re- 
 \ iew the finding of the Tax Commissioners- — they 
 might put it on any one of half a dozen different 
 theories of assessment or of any combination of 
 them. In this case it is admitted by the Commis- 
 sioners themselves that they had no theory. It is 
 obvious, therefore, that no matter what line of 
 testimony the relator might have adduced or how 
 many different lines of testimony on wholly con- 
 flicting theories, it could still be said that there 
 were ‘‘many circumstances” to be taken into ac- 
 count, so that it could always be affirmed upon the 
 theory of the learned Appellate Division that the 
 relator had not and, in the very nature of things, 
 could, under no circumstances, sustain the burden 
 of proof of showing that the valuation of the in- 
 tangible element was excessive. If we are to con- 
 tinue ill this country a government of laws and 
 not substitute one of men, it is evident that some 
 method of testing and reviewing the assessments 
 of the State Board of Tax Commissioners must be 
 evolved and sanctioned by the courts. So long as 
 the Commissioners testified that the earnings 
 theory was the one they deemed applicable to all 
 si)ecial franchises in New York County, we do 
 not see why it should not be i)ro])erly a])pli(HJ 
 here. 
 
The ordinary and usual method of arriving at 
 the earnings of a given stretch of track, vhether 
 between given terminals, or, as here, beginning, 
 in a railroad sense, at nowhere and ending no- 
 where, is on the mileage basis (p. 179, fol. 536). 
 This is the basis adopted by the relator, and its 
 figures are based on the proposition that for the 
 transportation of a passenger, say, between New 
 York and Buffalo, the stretch of track in question 
 constituting the alleged special franchise earns 
 precisely that proportion of the fare paid as the 
 length of the track within the alleged special fran- 
 chise bears to the length of the railroad between 
 New York and Buffalo. Considerable effort was 
 made on the part of the counsel for the defendants 
 to i^rove the existence of a so-called “arbitrary” 
 with reference to the alleged special franchise in 
 Park Avenue. That is to say, it was suggested 
 that the relator exacted an extra fare, or an ad- 
 dition to the fare, by reason of the use of this en- 
 trance into the Grand Central Terminal. This 
 effort failed (p. 176, fol. 528). Mr. JIarry E. 
 Coale, the chief rate clerk of the Passenger De- 
 imrtment of the relator, was examined at length 
 with reference to the subject under his charge, 
 namely, the jireparation of ijasseng(‘r fare sched- 
 ules and the division of passenger n'venues so 
 far as it relates to the sale of tickets between con- 
 necting carriers. 
 
 The witness testified (p. 313, fol. i)37) that tick- 
 ets were charged for strictly on the mileage basi 
 for passengers traveling over tlie alleged special 
 franchise in Park Avenue, and that no additional 
 amount, known as an “arbitrary,” was cliarged. 
 When asked to ex])lain what he meant by tin* term 
 “arbitrary” in tin* division of laissenger revenue, 
 be said (f;. 318,fol. 952) : 
 
152 
 
 “Between points where a transfer is in- 
 volved and in some cases, where they have 
 bridges that have been very expensive to l)e 
 put up, arbitraries are exacted. In certain 
 points in Michigan the Compendium is full 
 of arbitraries wliere a stage service or wagon 
 transfer is necessary to convey a passenger 
 from one depot to another, and the arbitrary 
 as a rule is taken out.” 
 
 After pointing out other points, such as the St. 
 Louis bridge crossing the Mississippi river, and 
 the bridge at (Quincy over the same river (p. 330, 
 fols. 990-993), he was asked (p. 331, fob 993) : 
 
 “Aside from the arbitraries to which you 
 have testified, do you know of any practice 
 among the railroads charging or giving more 
 proportionately by reason of the fact that 
 their lines are partly over very difficult and 
 expensive stretches of construction? 
 
 A. No, sir.” 
 
 He further testified (p. 333, fob 998) that the 
 mileage basis was calculated from the Grand Cen- 
 tral Station, located between 42nd and 45th 
 Streets. 
 
 With reference to computing the income from 
 the alleged special franchise in Park xV venue the 
 defendants’ expert, Mr. Jabez T. Odell, was ex- 
 amined. The substance of his testimony as to the 
 proportion of earnings coming through the Park 
 Avenue gateway will be hereafter discussed, his 
 figures being computed strictly ou the mileage 
 basis. xVs Mr. Odell’s own presentation of the 
 earnings claimed to have been made through the 
 Park Avenue gateway are based ui)on the most 
 tenuous averages taken from the oi)eration of the 
 entire svstem of relator’s railroad with oidv a 
 
103 
 
 remote approximation to the actual figures, his 
 criticism of the relator’s presentation is -not with- 
 out humor. In his serious moments, Mr. Odell 
 is e\udently convinced that the crossings and op- 
 erating expenses of this stretch of track are not 
 susceptible of demonstration. They must be com- 
 puted. 
 
 In his direct examination, in answer to counsel 
 for the defendants, he criticised the method 
 adopted by the relator as not a proper one. "When 
 asked to tell why, he said (p. 465, fol. 1393) : 
 “They were treating this 4.44 mile of track as 
 a part of the mileage of the New York Central 
 System in New York State instead of treating it 
 per se . — that is, by itself.’’ 
 
 “Q. That is you mean to say they were dis- 
 tributing the earnings made by this franchise, 
 or track in Cjuestion, over the 2,000 miles of 
 track, and thus thinning the earnings per 
 mile? 
 
 A. Yes, sir.’’ 
 
 Of course, it is a question whether or not this 
 method resulted in “thinning the earnings.” We 
 shall show that it resulted in making them larger 
 than they would otherwise have been. The wit- 
 ness was then asked (fol. 1394) : 
 
 “Q. What, in your opinion, is the proper 
 method to apportion this in order to arrive at 
 the gross eamings of this stretch of track in 
 question ? 
 
 A. The only way to arrive at the value of 
 this track in rpiestion is to find out the busi- 
 ness that passes over it, and the earnings 
 accruing to it.” 
 
 If the last answer of this witness is to be taken 
 literally, it will be im[)ossible to show that the 
 
154 
 
 stretch of track in question earned anything at 
 all. That the witness did not mean this, is shown 
 by his answer to questions on cross-examination. 
 
 Asked as to his previous experience in comput- 
 ing the earnings of any similar stretch of track 
 beginning at an arbitrary point between stations, 
 and ending at an arbitrary point between sta- 
 tions, he replied (p. 486, fob 1458) : 
 
 “I have had experience in estimating the 
 earnings per mile of road on various rail- 
 roads after certain improvements have been 
 made, but never referred to the mileage ex- 
 cept as a unit, one mile with another.” 
 
 “Q. That is you compared one mile with 
 another and compared one mile the same as 
 another? 
 
 A. Yes, sir. 
 
 (^. Then I understand your answer to my 
 question is that you have never had just this 
 same situation to cope with before? 
 
 A. I never did have; no, sir.” 
 
 Again, on page 493, fob 1478, the witness was 
 asked : 
 
 “Q. Now, coming to your testimony in 
 which you stated that in your judgment the 
 earnings from this stretch of track were not 
 in-o])erly computed by the relator. I under- 
 stand your opinion to he that the actual earn- 
 ings should he ascertained? 
 
 A. Yes, sir.” 
 
 This question was put to the witness, on i)age 
 494, at fob 1480: 
 
 “Q. Sup[)ose that on the first day of Janu- 
 ary there are 50 passengers embark from the 
 Grand Central Station and go to Tarry town, 
 and their fare is sold and collected on the 
 
155 
 
 train. Xow, to get at the earnings of this 
 particular section — this 4.44 miles af track — 
 out of a journey from the Grand Central Sta- 
 tion to Tarrytown, you would have to com- 
 pute that on a mileage basis ? 
 
 A. The average mileage. 
 
 Q. And there is no other way ? 
 
 A. No, sir.” 
 
 We submit, therefore, that it is established by 
 the evidence of the defendants, as well as by the 
 evidence of the relator, that the only method in 
 which the earnings from this alleged special fran- 
 chise can be ascertained is the mileage basis. 
 
 If, in making this computation, the earnings 
 from every individual passenger carried over this 
 stretch of track in and out of the Grand Central 
 Station, and going north from the 125th Street 
 Station, for the year ending December 31, 1899, 
 had been apportioned so that the proportionate 
 amount earned by this stretch of track out of 
 every journey by taking the ratio of the 4.44 miles 
 to the entire length of the journey, an impractica- 
 ble task would have l>een involved (p. 172, fob 
 515). It would have taken the efforts of a small 
 army of clerks and accountants extending over 
 many months (p. 178, fob 533). 
 
 A substituted method was emi)loyed which was 
 practicable, and so far as results went produced 
 aj^proximately the same figures, or a larger result 
 if anything (fob 533). If there was a difference 
 it was against the relator, and for this reason : 
 The rate charged on the Hudson Division betw<‘<*n 
 New York and Albany, formerly the old Hudson 
 Kiver Railroad, and on the Harlem Division, is a 
 trifle over 2 cents a mile. On the main line, be- 
 twcMUi Albany and Buffalo, tlie rate* is fixed by 
 statute at not to exceed 2 cents per mile; on other 
 
156 
 
 portions of the New York Central system, such as 
 the R. W. & 0. Division, occupying the northerly 
 section of the State, the M. & M. Division, ex- 
 tending through the Adironclacks, and the Penn- 
 sylvania Division, running south from Lyons, the 
 rate is only limited hy the general railroad act, 
 that is to say, an amount not exceeding 3 cei^ts 
 per mile, and this rate is usually charged (p. 177, 
 foi. 530). If, then, the general average per mile 
 from the whole system be taken with so many 3 
 cents per mile fares entering into it, it is obvious 
 that the general average of the income per passen- 
 ger per mile would l)e greater than if the income 
 were confined to the Hudson and Harlem Divi- 
 sions and the main line where the rate is substan- 
 tially 2 cents, or a small fraction above 2 cents, 
 per mile. As the great bulk of the commutation 
 business is done in and out of the Grand Central 
 station the general average per mile per commu- 
 tation passenger cannot vary perceptibl}" from the 
 actual average (p. 184, fob 551). 
 
 Mr. Odell’s attention was drawn to this circum- 
 stance. He was asked (page 496, fob 1488) : 
 
 “Q. So far as the general average per pas- 
 senger per mile includes earnings in the 
 3-cent zone, it would tend to be a larger aver- 
 age than the passenger per mile earnings on 
 the Harlem & Hudson River Divisions, where 
 the rate is in all cases below 3 cents a mile? 
 
 A. It certainly would.” 
 
 We think, therefore, that a sufficient basis has 
 been laid, as shown by the evidence, for the coin- 
 ])utation of the earnings on the mileage basis pro- 
 duced and sworn to by Mr. Foulds, Chief Clerk 
 in the Auditor’s office. 
 
 Mr. Foulds prepared a statement for the fiscal 
 year ending June 30, 1899, and also for the calen- 
 
157 
 
 (lar year ending December 31, 1899. The first 
 statement was to compare with the report filed 
 with the State Board of Tax Commissioners, and 
 the second to bring the earnings do^^■n to the near- 
 est possible date prior to the second Monday of 
 January, 1900, as of which date the alleged spe- 
 cial franchise is supposed to be valued. The first 
 statement was received in evidence and is found 
 on pages 146 to 149. The statement for the cal- 
 endar year is found on pages 151 to 153. For 
 convenience of discussion the latter statement is 
 reproduced here, as follows: 
 
 EXHIBIT VV. 
 
 Statement showing method of ascertaining 
 GROSS earnings OF THAT PORTION OF THE NeW 
 York & Harlem Railroad in Park Avenue 
 BETWEEN 45th StREET AND 133rD StREET, AND 
 AMOUNT OF SUCH EARNINGS FOR THE YEAR END- 
 ING December 31, 1899. 
 
 First: Earnings from operation of N. Y. C. & 
 H. R. R. R. Co. 
 
 (a) Passenger earnings 
 
 Total passenger earnings. 
 Commutation, school and 
 family ticket earnings. . 
 Earnings from single trip, 
 round trip and mileage 
 
 passengers carried 
 
 Total number of single 
 trip,roundtrip and mile- 
 age passengers carried. 
 Total number of miles 
 traveled by total number 
 of passengers carried.. 
 
 $14,411,527.44 
 
 $845,538.31 
 
 $13,565,989.13 
 
 20,513,3.37 
 
 813,861,466 
 
158 
 
 Earnings per mile per ( or- 
 dinary) passenger $ .01942 
 
 Total number commuta- 
 tion passengers carried. 6,162,950 
 Total number of miles 
 traveled by total number 
 commutation passengers 
 
 carried 115,218,467. 
 
 Earnings per mile per com- 
 mutation passenger.... $ .00734 
 
 Distance from 45tli Street 
 
 to 133rd Street 4.44 miles 
 
 Number of ordinary pas- 
 sengers on N. Y. C. Lines 
 at G. C. S., going and 
 coming 3,625,046 
 
 Number of commutation 
 passengers on N. Y. C. 
 
 Lines at G. C. S., going 
 
 and coming 4,312,669 
 
 Earnings from ordinary 
 
 passengers $312,568.86 
 
 Earnings from commuta- 
 tion passengers 140,548.16 
 
 (a) Total passenger earn- 
 
 ings $453,117.02 
 
 (b) Mail earnings: 
 
 Amount paid by Govern- 
 ment per mile of road : 
 
 New York and Buffalo 
 
 route $2,794.14 
 
 New York and Chatham 
 
 route 148.77 
 
 Railway Mail Service, 
 
 N. y'. to Buffalo 520.00 
 
 Total per mile of road. $3,462.91 
 
159 
 
 Number of miles of 
 track involved . . . -1.44 
 Total mail earnings. . . . 
 
 (c) Express earnings: 
 
 Total earnings on N. 
 
 Y. C 
 
 Total miles of railroad 
 
 involved 
 
 Amount of earnings .... 
 
 (d) Excess bassage : 
 
 Total earnings on N. 
 
 Y. C 
 
 Total miles of railroad 
 
 involved 
 
 Amount of earnings. . . . 
 Second: Earnings from 
 operation of X. Y., N. H. 
 
 & H. R. R. Co. 
 
 (a) Passenger earnings: 
 
 Total pa^unent on pas- 
 sengers carried 
 
 Number of miles 43rd St. 
 
 to Woodlawn Junction 
 Total passenger pay- 
 ments 
 
 (b) Mail, express and ex- 
 cess baggage 
 
 Total pa>Tnents 
 
 Recaditul.vtion. 
 
 From N. Y. C. & II. R. R. Co. 
 Passenger earnings. . . $453,11 
 
 Mail earnings 15,37i 
 
 Exj)ress earnings.... 2,47' 
 
 Excess baggage 25: 
 
 $15,375.32 
 
 $1,344,962.17 
 
 2,409.88 
 
 $2,477.98 
 
 $137,069.55 
 
 2,409.88 
 
 $252.54 
 
 $450,480.63 
 
 12.43 
 
 $160,911.78 
 
 25,780.74 
 
 9,208.89 
 
 7.02 
 
 5.32 
 
 r.98 
 
 2.54 
 
 $471,222.H6 
 
160 
 
 From N. Y., N. H. & H. R. R. Co. 
 
 Passenger earnings. . . $160,011.78 
 Mail, express and bag- 
 gage 9,208.89 
 
 $170,120.67 
 
 Grand total $641,.343.53 
 
 It appeared that in computing the earnings de- 
 rived from oi)eration by The New York Central 
 and Hudson River Railroad Company, the relator 
 herein, Mr. Foulds, by inadvertence omitted cer- 
 tain earnings of the station at 125th Street. These 
 were ascertained, and for the year ending Decem- 
 ber 31, 1899, amounted to $3,276.15 (p. 187, fob 
 560). Adding this to the total passenger earn- 
 
 ings from 
 
 New York Central operation $453,117.02 
 
 Earnings 125th Street station. . . . 3,276.15 
 
 Amounts to $456,393.17 
 
 or the total earnings for the entire year including 
 earnings from all sources would be $644,619.68 
 instead of $641,343.53. 
 
 AVe submit that this theory of presenting earn- 
 ings is a liberal one to the defendants, for the 
 reason that the alleged special franchise consid- 
 ered by itself, and separately and apart from the 
 railroad system in which it is a connecting link 
 has, to say the least, a very problematical value ; 
 at least, that was the testimony of the defendants’ 
 expert, Mr. Odell (p. 498, fol. 1493). He further 
 testified that separate and apart from the linos in 
 which it was a link it would not have any value of 
 consequence (p. 505, fol. 1515). 
 
 It is i)erhaps proper at this i)oint to consider 
 the theory on which the defendants claim the al- 
 
161 
 
 leged special franchise to he of great value. It 
 is, that if the passenger terminal, for example, of 
 the Railroad Compan}' was on the east bank of 
 the Harlem River, the earnings of the entire 
 system from the transportation of passengers 
 would be less. That is to say, there would be 
 fewer people traveling between, for example, 
 Syracuse and the Thousand Islands, if other pas- 
 sengers had to stop at the east bank of the Harlem 
 River in getting into New York City. The fal- 
 lacy of this contention is apparent upon the mere 
 statement thereof. It is speculative at best 
 whether or not the relator’s passenger traffic 
 would be affected if its i)assenger terminal was 
 on the east bank of the Harlem River. Consid- 
 ering the enormous fixed charges and the very 
 great expense attending the operation of the rail- 
 road in Park Avenue south of the Harlem River, 
 and the terminal at the Grand Central Station, it 
 is a very serious question whether the net earn- 
 ings of the company would not be greater if its 
 passenger terminal was on the east bank of the 
 Harlem River. 
 
 We submit, however, that the underlying fal- 
 lacy of defendants’ argument is predicated n])on 
 the proi)osition that the alleged special francbise 
 in Park Avenue should be credited with the earn- 
 ings of the general franchise of the company. 
 For example, the New York Central tracks run 
 through the City of Syracuse on Washington 
 Street. If the tracks in Washington Street slnndd 
 be torn up the railroad as an entity would be de- 
 stroyed. So, it might be argued the entire fran- 
 chise value of the railroad depended on maintain- 
 ing tracks in Washington Street, and it might be 
 argued that the entire earnings of the railroad, at 
 least to the extent that traffic )>assed ovei* Wash- 
 ington Street, constituted the measure of the valiu* 
 
162 
 
 of the special franchise. Snch an argnment would 
 have the same force as to every highway cross- 
 ing, with the logical result that the railroad com- 
 ically would be assessed for the value of special 
 franchises several thousand times more than the 
 entire value of the railroad. 
 
 This is the precise theory upon which the pre- 
 sentation of Mr. Odell was made, and which will 
 be hereaf{er examined. He attempted to sepa- 
 rate out of the total passenger, mail and express 
 earnings, the portion thereof which passes over 
 Park Avenue. For the year 1899, for example, 
 out of the total receipts from passenger, mail and 
 express, for the entire system of $16,677,136, he 
 arrives at $9,672,749 as the earnings of this al- 
 leged special franchise. He did not claim, of 
 course, that this entire amount of $9,672,749 was 
 earned exclusively upon the stretch of track in 
 Park Avenue, 4.44 miles in length, but his conten- 
 tion apparently was that some indeterminable 
 ])ortion thereof was earned by reason of the al- 
 leged special franchise. What portion was not 
 determined, and in fact is indeterminable, excejct 
 by taking the mileage proportion. In other 
 words, he would credit to the special franchise in 
 Park Avenue the entire earnings from the general 
 franchise of the Company so far as the same were 
 derived from operation through the Park Avenue 
 gateway. 
 
 The illegality and unfairness of this method of 
 assessment has been condemned by the Court of 
 Apiceals in People ex rel. Delaware^ Lachau'auna 
 cC Western Railroad Cowpanif vs. Clapp (152 X. 
 Y., 490). This case involved a local assessment 
 l)laced upon about ly^ miles of the relator’s road 
 running from Ttinghamton to F>ulfalo, consist lag 
 of a double track, with about 3 miles of sidetrack. 
 
163 
 
 ■\vitli three stations, water tanks, and one hnndred 
 and twelve acres of land. The i)ro])ert5* was as- 
 sessed at $300,000. The method of arrivino: at 
 the value of the real estate of the relator for the 
 ])urpose of taxation, which was adopted by the 
 assessors, is thus stated hy them in their return 
 to the writ of certiorari: 
 
 “In fixing upon the sum at which the real 
 property was assessed we considered the 
 same not as a separate piece of real estate 
 standing alone, hut as a part of the extensive 
 and valuable system of railroads leased and 
 occui)ied hy said relator, extending from the 
 City of Binghamton to the City of Buffalo, 
 and as a part of the extensive and valuable 
 system of railroads operated by the relator, 
 and based our said assessment thereof upon 
 the cost, rentals and earnings of said railroad 
 as shown by the annual report of said re- 
 lator to the board of railroad commissioners 
 of the State of New York.” 
 
 The relator gave uncontradicted proof of th(> 
 cost of reproducing the tangii)le ]}roperty at a 
 sum considerably less than the amount fixed bv 
 that method of assessment, and held that the fail’ 
 cost of rejtroduction is the true criterion. 
 
 O’Brien, J., says, at i)age : 
 
 “The principle of assessing a few miles of 
 railroad in a town according to the i-elations 
 wliich it is supposed to bear to the whole of 
 a vast and intricate system, or to the income 
 or earning f)ower of the entire system, draws 
 into the calculation so many eleinenis that 
 the process becomes too complex and difficult 
 for even an expert.” • • • 
 
 Page 406: 
 
 “That such a principle of valuation is mis- 
 
164 
 
 leading and impossible of application with 
 an}" approach to justice or accuracy is suf- 
 ficiently shown by what appears in this rec- 
 ord. The learned referee, upon whose report 
 the assessment was confirmed, resorted in his 
 oi)inion to a calculation to show the annual 
 rental of the whole road per mile and then 
 capitalized that sum at six per cent., which 
 produced a result much larger even than that 
 found by the assessors. He then suggested 
 that an allowance should be made for a por- 
 tion of that rental since it was to be credited 
 to the use of terminal and other property not 
 embraced in the specific seven and one-fourth 
 miles of railroad, and he then proceeds to re- 
 duce his figures to correspond with those of 
 the assessors. This shows that the theory 
 adopted, in order to work at all, had to be 
 supplemented in the end by an arhitrartj al- 
 lowance for income that the particular prop- 
 erty in question had no shore in producing.” 
 (Italics ours.) 
 
 Of course, the case cited must be carefully read 
 in determining its application to the case at bar. 
 In the case cited there was no special franchise 
 in the 744 miles of track to be valued, and there 
 was no intangible element. What the Court of 
 Appeals condemned was the theory of crediting 
 to the particular stretch of track earnings which 
 had accrued to other portions of tlie geiieral sys- 
 tem of the Delaware, Lackawanna & Westein 
 liailroad Comi)any. If the stretch in (piestion, 
 IVx miles, had been laid out and constructed upon 
 a public highway in existence before the railroad 
 was built, and the franchise lax law had then been 
 in force, the situation there and in the case at bar 
 would have been identical (assuming a special 
 franchise in Park Avenue). But, we submit, the 
 fair deduction from the oi)inion of the Court of 
 
165 
 
 Appeals in this ease is, that each stretch of track 
 which is subject to assessment is to be credited 
 only with its own earnings, assuming the element 
 of special franchise enters. 
 
 It is argued by the Referee and by the resi)ond- 
 ents that this stretch of track is a “business get- 
 ter”; that travelers coming from Chicago, for ex- 
 ample, prefer this route to that of the Pennsyl- 
 vania, the Erie, or the Baltimore and Ohio, be- 
 cause it lands them without water carriage in the 
 heart of Manhattan Island; that the same con- 
 siderations apply to other cities and towns served 
 also by competing lines. Assuming the truth of 
 this claim, is not the greater volume of passenger 
 traffic resulting exactly reflected in the number of 
 passengers carried over this stretch of track in 
 Park Avenue, as compared with the number of 
 passengers that would be carried if the terminal 
 was on the east bank of the Harlem River or on 
 the west bank of the Hudson? Our statement of 
 gross earnings, however, is based on the exact 
 number of passengers that are actually conveyed 
 over this stretch of track. If the rate of fare be- 
 tween New York and Chicago is the same on high- 
 class roads operating fast trains (such as the 
 railroad of the relator and that of the Pennsyl- 
 vania Company, p. 332, fob 1)95), must not the 
 assumed advantage enjoyed by the relator neces- 
 sarily Ije measured l)y the larger volume of traffic 
 over the track in Park Avenue? What othei- 
 possible element of advantage is there? 
 
 If passengers pay the same rate per mile (or a 
 less rate) for transportation over this stretch of 
 track as over any other e(|ual stretch of track 
 o|)eratefl l»y relator, what ]»ossible ad\antage is 
 the Park Avenue gateway to the relator save* only 
 as such advantage is shown in the volume of 
 traffic? 
 
 The advantage and cf)nvenience to the traveling 
 
166 
 
 public, for wliicli notliing additional is paid, seems 
 to be taken as a justification for penalizing the 
 relator ! 
 
 The learned Referee and the respondents would 
 have the Court enter into the domain of pure 
 imaginative speculation, to seize some fancied 
 element of advantage which is not shown and 
 ('ould never be shown in the figured results of 
 operation, no matter what system of accounting 
 relator adopted. Even if such opinion evidence 
 were competent, the “exi)erts” which the learned 
 Referee seems to have in mind could do no more 
 than make wild random guesses upon theoretical 
 elements of valuation which exist only in the imag- 
 ination. Brought down to the realm of actuality 
 and confronted with actual figures of operation, 
 on cross-examination, they would either have to 
 adoi)t the earnings as shown b}" relator, or fall 
 back on mere unsupi)orted opinion. In either 
 event their views would not aid the Court. 
 
 An examination of the elements upon which the 
 statement or presentation of Mr. Odell is based 
 (Appendix, p. 988, fob 2962) will show that dif- 
 ferent periods of time have entered in in such 
 a way as to make his results inconclusive on any 
 basis. For example, to get at the so-called local 
 passengers in and out of the Grand Central Sta- 
 tion, and the inter-line passengers both this side 
 of, and west of, the Niagara frontier, he relies 
 upon a statement which was furnished by Mr. 
 Foulds at the request of counsel for the defend- 
 ants, and is inserted at page 369, folio 1105. This 
 statement covers the year ending December 31, 
 1899, l)ut for tbe commutation, school and family 
 ticket i)assengers passing in and out of the Grand 
 ('entral Station be goes to the statement of Mr. 
 Foulds at page 1-17, folio 441 of the record, whicli 
 
167 
 
 is the statement for the year ending June 30, 1899. 
 Then to get at the passenger earnings per mile of 
 ordinary passengers, including mail and express, 
 he takes the figures read in evidence from the 
 company’s annual report for the year ending 
 June 30, 1899 (p. 438, fol. 1312). Even though 
 there were any force in the method which Mr. 
 Odell adopts in presenting his figures, the latter 
 taken from such inconsistent sources present 
 nothing to which any significance can attach. 
 
 We could not obtain from Mr. Odell any justi- 
 fication satisfactory to us for jumbling together 
 the mail and express earnings with ordinary pas- 
 senger earnings. He admitted on cross-examina- 
 tion (p. 492, fol. 1475) that the usual practice in 
 computing the earnings of a railroad is to sep- 
 arate the passenger, mail, freight and exiiress 
 earnings. He further testified (i). 497, fol. 1489) : 
 
 “Q. No. Mr. Odell, assuming that the 
 mail earnings are i)aid for by tlie federal gov- 
 ernment strictly on a mileage basis, in your 
 judgment would that be the i)roper method to 
 ascertain the earnings from tl'e handling of 
 mail on tliis stretch of track?” 
 
 This question was amended so as to read “track 
 mileage basis,” and the witness answered: 
 
 “A. That is the only wa)' to determine tlie 
 value of this piece of track, to credit it with 
 its proportion of the mail earnings.” 
 
 And this is the i)recise method followed by Mr. 
 hMulds in j)resenting his computation of the pro- 
 portionate earnings of this alleged special fran- 
 chise. He has followecl the same method in pre- 
 senting the express and excess baggage (‘ariiings, 
 notwithstanding tin* fact that the exjiress (nira- 
 
168 
 
 ings are three times larger over other portions 
 of the system, for e-^ample, ou the Mohawk Divi- 
 sion, than out of New York (p. 199, fol. 595). 
 
 The rental derived from the New York, New 
 Haven ahd Hartford Railroad Company, for use 
 of the tracks from Woodlawn in, is treated on 
 the same mileage basis, and it is difficult to per- 
 ceive on what other basis any logical presenta- 
 tion could be made. The defendant’s argument in 
 this case is not that the special franchise in Park 
 Avenue in and of itself yields anything, but that it 
 forms a means of access into the heart of the city. 
 The same argument app*lies with just as much 
 force to that portion of the Harlem tracks which 
 extend from the Harlem River north to the city 
 line, and the Spuyten Duyvil & Port Morris tracks 
 which connect the rails of the Hudson Division. 
 These northerly tracks are within the city limits, 
 and it is just as necessary for trains to get over 
 these stretches of track to get into the city as it 
 is to go over the tracks in Park Avenue. 
 
 Why, then, should not the earnings either from 
 the New York Central operation, or from the New 
 Haven rentals, he apportioned strictly on the 
 mileage basis? For purposes of comparison we 
 have taken Mr. Odell’s presentation of $9,672,749 
 as the total earnings through the Park Avenue 
 gateway, and apportioned them according to the 
 mileage of the alleged special franchise, to wit, 
 4.44 miles. 
 
 The elements and calculations are as follows: 
 Earnings per passenger 
 mile as derived from the 
 company’s annual report 
 ending June 30, 1899 — 
 
 (a) Ordinary passengers 
 including mail and ex- 
 ])ress 
 
 $.24(i425 
 
169 
 
 (b) Commutation passen- 
 gers (school and family 
 tickets) 
 
 $.00742 
 
 Xo. of ordinary passengers 
 
 Grand Central Terminal : 
 
 Local 
 
 3,066,495. 
 
 Inter-line, East 
 of Niagara 
 Frontier 
 
 293,180. 
 
 Inter-line, West 
 of Niagara 
 Frontier 
 
 265.371. 3,625,046. 
 
 No. commutation passen- 
 gers, Grand Central Ter- 
 minal 
 
 4,122,711. 
 
 3,625,046 X 4.44 x $.0246425 = $ 396,625.85 
 4,122,711 X 4.44 x $.00742 = $ 135,821.89 
 
 $ 532,447.74 
 
 Compare this with Mr. Foulds’ presentation for 
 the year ending June 30, 1899 (without 125th 
 Street; p. 149, fol. 445), $438,509.40; for the year 
 ending December 31, 1899 (fols. 458, 560), $474,- 
 499.04). 
 
 We have already pointed out the method sworn 
 to by the defendant Tax Commissioners in all 
 assessments of special franchises located in New 
 York County made by them, viz., they took a per- 
 centage, in no case exceeding five, of the gross 
 earnings, where there were net earnings, and di- 
 vided it by the tax rate, the quotient being their 
 valuation of the intangible element; tliis, added 
 to the valuation of the tangible i)roperty, nuule u]) 
 the assessment. 
 
 Without any deduction for operating ex])enses, 
 concededly large, and without any deduction of 
 
170 
 
 an income of say six per cent, upon the tangible 
 property in the franchise or the tangible property 
 used in connection with the alleged special frau 
 chise, the right to deduct which in getting at an 
 as^sessinent under the net earnings theory has 
 been repeatedly recognized by the courts, but 
 merely to get at the utmost assessment which the 
 Board would have been justified in making on 
 their own theory, and taking the undisi)uted tes- 
 timony as to the gross income apportioned on 
 the mileage basis of the alleged special franchise, 
 these statements would be made up as follows : 
 
 Gross income (Foulds) New York 
 
 Central operation $474,499.04 
 
 Paid by New Haven Company for 
 trackage 170,120.67 
 
 Total gross income $644,619.71 
 
 5% of the foregoing is $32,230.9855 
 which divided by the tax rate for 
 1900, viz., .0224771 produces as the 
 
 value of the intangible $1,433,948.00 
 
 To which add the value of the 
 tangible as testified to by Mr. Hoyt 
 and as found by the Court below. . 4,899,300.00 
 
 Total assessment as full value $6,333,248.00 
 
 which when equalized by taking 
 the testified ratio of 67% produces 
 an equalized assessment of $4,243,276.16 
 
 If we follow the computations of the defend- 
 ants’ expert, Mr. Odell, api)ortioning the alleged 
 special franchise its share on the mileage basis, 
 we obtain : 
 
 Gross income. New York Central 
 operation 
 
 $532,447.74 
 
170,120.()7 
 
 Paid by New Haven Company for 
 trackage rights 
 
 Total gross income $702,568.41 
 
 5% of the last mentioned amount 
 
 is $35,128.4205 
 
 dividing this amount by the tax 
 rate of .0224771 we get as the 
 
 value of the intangible $1,567,303.00 
 
 to which add the value of the tan- 
 gible as found by the Court below 4,899,300.00 
 
 which makes the total assessment 
 
 at full value $6,466,603.00 
 
 equalizing it by taking 67% there- 
 of as found by the State Board of 
 Kqualization for the year in ques- 
 tion we get an equalized assess- 
 ment of $4,332,624.01 
 
 which we respectfully submit is the utmost pos- 
 sible assessment which the facts will warrant. 
 
 We have, however, the testimony of the de- 
 fendant Tax Commissioners that where the ex- 
 pense of oi)erating a given s])ecial franchise was 
 ecjual to, or in excess of, tiie gross earnings, when 
 the franchise was fairly and reasonably exercised, 
 the Tax Commissioners put a merely nominal 
 valuation upon the intangible element, and con- 
 fined their assessment to the tangible proj)erty, 
 and that this course had been actually followed 
 by the Board in assessing certain si)(!cial fran- 
 chises for the purjioses of taxation (]». 141, fol. 
 422). 
 
 In the present case it was eheerfnily concedecl 
 by the defendants’ witness, Mr. Odell, that tin; 
 
tracks in question are put to the best railroad 
 purposes to which the same could be, and that the 
 tracks were used to the utmost possible extent 
 (p. 488, fob 1463; p. 487, fob 1459). 
 
 We have also the testimony of Mr. Stearns, one 
 of the defendants, that upon the assumption that 
 the figures adduced by the relator, showing gross 
 earnings and operating expenses were correct, the 
 intangible element in the alleged special franchise 
 has no more than a nominal value (p. 255, fob 
 765). 
 
 The relator produced a witness, Mr. 11. L. In- 
 gersoll, employed in the Operating Department 
 of the relator, and particularly engaged in mak- 
 ing computations of this character, who testified 
 to the expenses of operating this stretch of track 
 in Park Avenue between 45th Street and 133rd 
 Street for the calendar year 1899 (p. 156, fob 468) 
 as follows : 
 
 “Operating expenses of that portion of the 
 X. Y. & Harlem Railroad in Park Avenue between 
 45th and 133rd Streets. Calendar year 1899 ; 
 
 Maintenance of Way $194,131.99 
 
 Station Employees 28,921.29 
 
 II. L. & S. at Sta 15,855.00 
 
 Towermen 38,559.95 
 
 Passenger Trains 91,468.63 
 
 Shop Trains 52,441.82 
 
 Accidents 218,946.72 
 
 Executive Expenses 64,032,51 
 
 Total $704,357.91” 
 
 With gross earnings of $644,619.68 a defiOt of 
 $59,738.23 results. 
 
 The' learned Referee api)arently thought that 
 this method of ])r('senting tlu* expenses of oi^er- 
 
173 
 
 ating the alleged special franchise was open to 
 criticism (p. 737, fol. 2211). His view a.pi)areutly 
 is that the relator ought not to have charged the 
 actual expenses of maintaining this particular 
 stretch of track, but should, perhaps, have merely 
 assigned the general proportion of maintenance 
 of way, signal, station, etc., exiienses, which this 
 stretch of track bears to the whole system of rail- 
 roads operated by the relator. AVe fail to appre- 
 ciate the justice of this criticism. Our statement 
 of earnings of this franchise is not based upon the 
 average earnings per mile of all the tracks oper- 
 ated by the relator, but the actual earnings com- 
 puted on the mileage basis of the actual passen- 
 ger, mail and express that pass over this stretch 
 of track. It is claimed that this alleged special 
 franchise is a great business getter, and it seemed 
 to the relator, therefore, appropriate to show 
 what the business really gotten amounted to. 
 Following this theory of presenting the gross 
 earnings which the defendants say is the only 
 right one, win' is it not logically consistent to 
 prove as nearly as may be the actual expenses of 
 maintaining, and oi)erating trains over, this 
 stretch of track? It was possible to get with a]»- 
 proximate accuracy the expense of maintenane(> 
 of way, station employees, heat, light and service 
 at stations, towermen, and accidents. It does not 
 seem to be questioned that this stretch of ti'aek 
 is much more ex])ensive to maintain, consisting 
 as it does of tunnels, and stone and st<*el viaducts 
 subject to enormous daily use, than would be a 
 similar 4.44 miles of foui'-track railroad lying out 
 in the oi)en country, and suppoi-ting much less 
 dense traffic. 
 
 Of course, it was not ]»ossible to give with ex- 
 actness the cost of «)i)erating passenger trains 
 and sho}) trains over this stretch of ti'ack, but it 
 
174 
 
 is manifest that the expense of operating a train 
 between the Grand Central Terminal, for instance, 
 and Poughkeepsie must be substantially the same 
 amount for each mile of the journey, and the ex- 
 pense, therefore, of pulling such a train over this 
 stretch of track 4.44 miles in length would be the 
 ])roportion which 4.44 miles bears to the distance 
 in miles between the Grand Central Terminal and 
 Poughkee])sie, and so with other train movements, 
 mile for mile the cost of moving a passenger train 
 over any part of the system of railroads operated 
 l)y the relator would approximate the same. 
 
 It is ol)vious that there is no system of account- 
 ing by which the cost of train operation over this 
 particular stretch of track could be definitely as- 
 certained. A com])utation based upon averages 
 is inevitable. We submit that if there is a dif- 
 ference, the expense of operating here would be 
 larger on account of the large number of train- 
 men who are necessary in the suburban and com- 
 mutation service, and in the frequent stoics and 
 waits which trains have to make in getting in and 
 out of a very congested terminal. 
 
 Abundant oppoidunity was given the defend- 
 ants, and the intervening City of Xew York, to 
 examine the data on which Mr. Ingersoll’s com- 
 ])utations were based, and to cheek his calculations 
 before he was cross-examined. He was some- 
 what thoroughly cross-examined, but his figures 
 were in no way inqmgned. It is also significant 
 that the defendants having been given access to 
 the Relator’s records, and having all the means 
 of ])resenting a statement of the cost of operating 
 this stretch of track, which the Relator had, of- 
 fered no evidence on tlie subject. 
 
 Even if we attempt to estimate the cost of oper- 
 ating this stretch of track, using only the general 
 
average results on the Company’s whole business, 
 we should find that the expenses of operation 
 amount to a very substantial sum. It was shown 
 that upon the entire operations of the Company 
 for the year ending June 30, 1899, the operating 
 ratio, that is the cost to secure each dollar of 
 gross earnings, was 62.69% (p. 288, fol. 862). 
 The application of this ratio to the gross earn- 
 ings of $644,619.71 
 
 would show that the cost of operation was not less 
 than $464,292.10. Such a basis of computation, 
 we submit, is unjust to the relator as it puts this 
 short and extremely expensive stretch of track 
 substantially on the same basis as an equal stretch 
 of track away off in the country where there 
 are no special structures, such as tunnels and via- 
 ducts to maintain, and no such heavy outlay for 
 signals and stations, and the like expenses, as 
 are necessarily incurred in operating this stretch 
 of track. Even with the ap])lication of this theory 
 of comimting the expenses of operating this track 
 we would have a surplus of only $180,327.61. On 
 any theory of net earnings such as that set forth 
 in the Jamaica Water Supplij Company’s case 
 the relator would be entitled to deduct a fair re- 
 turn ujjon the tangible property in the alleged 
 special franchise; this as found ))y the Court is 
 $4,899,300. Six jjer cent, on which is $293,958, 
 leaving a deficit of $113,631, so that ui)on either 
 the theory of the defendant Tax Commissioners, 
 or that of the net earnings theory set forth in the 
 Jamaica Water Supply Company’s case, the in- 
 tangible element in this special franchise would 
 have no value. 
 
 If we take Mr. Odell’s figures and get at tin* 
 mileage ])roportion, a flefieit would result, and 
 this without crediting the relatoi- with a 6 ])er 
 
176 
 
 cent, return on any proportion, no matter how 
 small, of the enormous investment of capital 
 which has been made in the Grand Central Ter- 
 minal and the Mott Haven yard, both of which are 
 absolutely essential to achieve any earnings what- 
 ever upon the alleged special franchise. The 
 omission to credit the relator with any return 
 whatever upon this property, which represents 
 many millions of dollars, and on which the taxes 
 alone represent enormous sums, certainly ob- 
 viates the criticism of the referee at page 738, 
 folio 2213. 
 
 It should be borne in mind that for many years 
 the relator has been taxed to the very limit on 
 this property constituting the alleged special fran- 
 chise. The Court of Appeals in People ex rel The 
 Neiv York d Harlem Railroad Company v. Com- 
 missioners of Taxes of New York (101 N. Y., 
 322), reversing the General Term (23 Hun, 687), 
 held that the Company must pay taxes upon all 
 of the tunnel and viaduct structures, though the 
 bulk of them were erected solely to facilitate the 
 use of Park Avenue for street jjurposes. 
 
 Upon the argument of this case before the 
 Referee and at Special Term, the defendants 
 presented a computation of the value of the in- 
 tangible element in this alleged special franchise, 
 based upon computations of Mr. Odell, and in 
 part upon certain assumptions and calculations 
 made upon figures presented in the Annual Re- 
 port of Relator to its stockholders. The Referee 
 and the Trial Court took no stCK’k in tliis i)resen- 
 lation. The Referee says at folio 2217: “It is 
 based on what might be called a revenue car mile 
 basis. As I have said before, however, it reciuires 
 us to assume facts and eliminate figures which 
 ]n’event its result having the element of accuracy 
 which should be required in a definite finding of 
 
money value to the special franchise.” And the 
 Findings of Fact which were presented by the 
 Respondents, based upon this computation or 
 presentment (folios 2076-2088) were refused by 
 the Referee, and the Court. The effort in any 
 event shows the desperate straits to which the 
 defendants felt themselves reduced in order to 
 produce some figures which could be asserted as 
 justifying the wholly conjectural assumption of 
 the defendant Tax Commissioners that the in- 
 tangible element in this franchise was worth $5,- 
 192,000. The assertion as set forth in the 148th 
 Proposed Finding of Fact of the Intervenor (fol- 
 2088) which was refused, that the value of this 
 alleged special franchise is the sum of $73,834,916 
 for 4.44 miles of track as against a total value of 
 the entire railroad property, exclusive of equip- 
 ment, of $135,339,263.15, including a total of 
 2,394.88 miles of railroad sufficiently indicates the 
 absurdity of the result. 
 
 In the 1908 case argued herewith, upon gross 
 earnings, according to Mr. Odell, of $9,511,725 
 through the Park Avenue gateway, or only $161,- 
 024 less than the like earnings here, using tlie 
 same method, defendants work out an intangible 
 value of $33,506,133, or $35,429,573 less value 
 than for 1900. In other words, while earning 
 the same gross income substantially, the alleged 
 special franchise is worth twice as much in 1900 
 as in 1908! 
 
 The fact that the Intervenor, The (fity of New 
 York, is also an ai)j)ellant here, and might urge 
 this presentation upon tlie Court, with a view to 
 getting a ruling as to tlu* proper method of get- 
 ting at the value of the intangible elenunt, must 
 be our excuse for entering more at large into an 
 analysis thereof. 
 
178 
 
 This presentation consists of two parts : 
 
 The first is Mr. Odelhs calculation, based upon 
 the annual report to the stockholders and upon 
 the evidence in the case as well, of the passenger, 
 mail and express earnings made with reference 
 to the alleged special franchise, not wholly de- 
 rived from it, but earnings in the securing of 
 which the alleged special franchise was an in- 
 strumentality. 
 
 We have already discussed to some extent this 
 presentation of gross earnings through the Park 
 Avenue gateway. 
 
 The second part of the presentation consists of 
 a calculation of the supposed cost to the relator 
 of earning the portion of its passenger, mail and 
 express earnings, which are derived through the 
 Park Avenue gateway, and then, having arrived 
 at the supposed net earnings, the presentation 
 proceeds with the deduction of certain items which 
 it is claimed should be credited the relator before 
 any final net earnings are arrived at, which, when 
 capitalized, form the supposed value of the in- 
 tangible element. 
 
 The entire presentation is based upon certain 
 assumptions which we think it is appropriate to 
 discuss at the outset, and which we think are 
 unwarranted. 
 
 First. — It is assumed, both in presenting the 
 alleged gross earnings and the cost of operation, 
 and deductions from the supposed net return, 
 that the alleged special franchise in Park Avenue 
 in a sine qua non, without which no earnings what- 
 ever would accrue to the New York Central aiul 
 Hudson River Railroad Comiiany from ])assen- 
 ger, mail or ex])ress, so far as the same are ti'ans- 
 ported in and out of the City of New York. This 
 railroad system operated by the relator is re- 
 
179 
 
 garded as a mere appanage of a stretch of track 
 4.44 miles in length, connecting the relator’s pas- 
 senger terminal with its railroads in the City of 
 New York and beyond. 
 
 This assumption, as we have alreadj" endeav- 
 ored to show, is unwarranted both in fact and in 
 reason. If the railroad stopped short at the east 
 bank of the Harlem River and had its terminal 
 there, whether or not its passenger, mail and ex- 
 press earnings would be the same is wholly a 
 matter of conjecture. There is no evidence on the 
 subject, and so speculative a proposition is not 
 susceptible of evidence. IVhether or not there 
 would be in fact any material diminution in such 
 earnings is wholly a speculative proposition. 
 Whether or not the earnings under such circum- 
 stances would be diminished to such a point as to 
 more than equalize the very great cost which the 
 relator is put to for fixed charges, taxes and op- 
 erating expenses with reference to the terminal 
 as it now exists, is wholly speculative. That the 
 alleged special franchise in Park Avenue if dis- 
 severed from the railroads which connect witli it 
 at tlie south bank of the Harlem River, and oi)ei‘- 
 ated as a sei)arate line, would he unremunerativc 
 in view of the vast outlay of cai)ital, fixed charges, 
 operating ex])enses and taxes is substantially 
 conceded by Mr. Odell (]). oOo, fol. 1515). We say 
 that to regard the alleged special franchise in 
 Park Avenue as the essential feature of the entire 
 railroad system oi)erated by the relator, all oilier 
 parts being subordinated to this short segment 
 of railroad, is as repugnant to the facts and to 
 reason and to justice to the relator as the oth(>r 
 view that the alleged special franchise must be 
 considered as a separate railroad beginning at 
 the Grand Central Terminal and ending at the 
 Harlem River, would be unjust to the defendants. 
 
180 
 
 Our view has been, and we have presented this 
 case and the evidence therein npon the assump- 
 tion that one part of the railroad was as good as 
 another, that one part of the railroad was as 
 necessary to sustain corporate activities as eveiy 
 other part of the railroad, and that in getting at 
 actual earnings, and actual expenses of operation, 
 where the figures could not be absolutely obtained, 
 the mileage proportion should govern. 
 
 The passenger who goes from Albany to New 
 York, or vice versa, over the railroad of the rela- 
 tor, does so quite as much because the railroad 
 gets into the heart of Albany as because it 
 reaches “the heart of New York.” The transpor- 
 tation facilities at Albany are just as essential as 
 the transportation facilities at New York City. 
 One cannot be justly subordinated to the other. 
 
 The presentation of the defendants assumes 
 that the vast network of railroads covering the 
 State, and operated by the relator in connection 
 with lines traversing other States, is merely 
 physical property used in connection with this 
 alleged special franchise. 
 
 The presentation involves the assumption that 
 the relator has no other franchises, general or 
 special, over its entire system, but merely this 
 alleged special franchise in Park Avenue, and 
 that on all its other property outside of this al- 
 leged special franchise it is to be entitled only to 
 a sup])osed fair return, irrespective of its right 
 to derive a profit from the whole of its system 
 which capitalized might be regarded as the value 
 of its general franchise and of its aggregate 
 special franchises outside of Park Avenue. 
 
 We submit that merely to state these considera- 
 tions is to show that this first, and fundamental, 
 assumption on the ])art of the defendants is wholly 
 
ISl 
 
 without warrant. As already pointed out, if de- 
 fendants’ argument be carried to its logical result, 
 it would mean that the value of the relator’s prop- 
 erty would be multiplied by as many times as it 
 had any alleged special franchises on its entire 
 system subject to assessments by the State Board. 
 
 Second. — The defendants through the testimony 
 of Mr. Odell, having worked out a proportion of 
 the earnings from passenger, mail and express, 
 due to the Park Avenue gateway, amounting for 
 the year 1899 to $9,672,749, and this by jumbling 
 together the earnings from passenger, mail and 
 express in a manner which we ,have already 
 argued is wholly unjustifiable, inasmuch as these 
 items are quite susceptible of separate computa- 
 tion, and are ordinarily so computed in getting at 
 the earnings of a railroad, are confronted with 
 the necessity of showing what it costs the rail- 
 road company to earn the $9,672,749. To prove 
 this precisely is, of course, impossible. Only ap- 
 proximate comi)utation, or estimate, can be pre- 
 sented. The value of such estimate must neces- 
 sarily depend upon the basis of computation. 
 
 We think there is considerable significance in 
 the fact that Mr. Odell was not produced as a wit- 
 ness on the jiropositioji of what the fair cost to 
 the relator was of earning the $9,672,749 gross to 
 which he testified. He was not asked as an exqun t 
 to designate any basis of com))utation of such 
 cost from the company’s annual re})ort. Tin* 
 basis used is not fortified by his testimony or l»y 
 that of any expert witness. The only jierniis- 
 sible inference is that no resi)ectable testimony 
 could be secured to ju.stify the basis of computa- 
 tion ado)»ted by defendants, and the assum])tions 
 on which it rests; that no railroad man of (‘xperi- 
 ence and with any regard for his rei)utation would 
 
182 
 
 stand for any such presentation as defendants 
 make. 
 
 In the present case the entire earnings of the 
 railroad from operation are shown in the annual 
 report, comprising earnings from freight opera- 
 tion, transportation of passengers, mail, express, 
 rentals and miscellaneous. No freight is trans- 
 IJorted over the alleged special franchise, so that 
 the gross earnings as computed hy Mr. Odell may 
 not and do not include any freight earnings. 
 Therefore, the cost of making such earnings can- 
 not in any way be predicated upon the cost of 
 freight operation. There is no separation in the 
 expense of making freight earnings, and making 
 the passenger, mail and express earnings. This is 
 manifestly impossible, except by estimation, be- 
 cause the same instrumentalities of track, signals, 
 terminals, round houses, shops, and to some extent 
 motive power, are used indiscriminately in both 
 freight and passenger operation. 
 
 The defendants, in getting at an estimate of the 
 supposed cost to the relator of making the sii])- 
 posed earnings through the Park Avenue gate- 
 way, have adopted the basis of car mileage, with- 
 out discriminating between passenger and freight 
 car mileage. The defendants postulate that the 
 relator is entitled to no credit whatever for the 
 cost of moving empty freight cars, and work cars, 
 although these operations are absolutely neces- 
 sary to the transportation of passenger and 
 freight cars which do contain passengers or 
 freight, and are, therefore, designated as revenue 
 earning. We can see no reason or justice in 
 making this exclusion. 
 
 The defendants then take the aggregate car 
 mileage, that is the aggregate number of miles 
 that one loaded freight car would make, and the 
 aggregate nnmher of miles which one loaded jias- 
 
183 
 
 senger car would make in the year and use the 
 total as a means of getting at the ratio of total 
 expenses of operation, Avhich the relator incurred 
 in order to earn the $9,672,749 gross. This com- 
 putation necessarily assumes that it costs exactly 
 the same amount of mone}’ to move one loaded 
 freight car a mile as it does to move one loaded 
 passenger car the same distance, and that the cost 
 is the same for eveiw part of the system.. It is 
 quite needless to say that there is no evidence in 
 the record which supports any such assumption. 
 It is absolutely contrary to common knowledge, 
 and to common sense. A freight car is moved in 
 a train of from 30 to 90 cars. It is moved at a 
 comparatively slow speed, and with a crew con- 
 sisting of only 4 or 5 men. A passenger car is 
 one in a train not ordinarily exceeding 12 or 15 
 cars, and is moved at a speed 2 to 6 times greater 
 than that of a freight train, with correspondingly 
 heavier wear upon the track. In the cost of mov- 
 ing loaded freight cars and passenger cars the 
 expense of up-keep is necessarily included. A 
 passenger car costs many times more than a 
 freight car. It contains more expensive material, 
 and apparatus, it is finished in a much more ex- 
 I)ensive manner as regards interior furnishings, 
 painting, varnishing, etc., and all of these items 
 of up-kee]) are necessarily verj' much heavier than 
 in the case of a freight car. 
 
 The station expenses involved in handling j)as- 
 sengers in and out of cars is heavy compared with 
 the loading and unloading of freight cars, most 
 of which is done by tbe shii)pers and consignee. 
 
 We submit that this liasic assumption is wholly 
 unwarranted, and its rejection entirely overtiums 
 the calculation of the defendants. In order to gr-t 
 at a working ratio to find the sup]»osed expemses 
 
184 
 
 for earning tlie $9,672,749, defendants must make 
 another step and erect a still further hypothesis. 
 There is nothing to show in the records, or annual 
 report, the proportion of passenger car mileage 
 in and out of the Grand Central Terminal. De- 
 fendants, therefore, seek to derive one by assum- 
 ing that the average number of passengers in a 
 car running in or out of the Grand Central Ter- 
 minal is the same as it is over all other i)arts of 
 the system; in other words, that traffic is no 
 denser over the alleged special francb’se in Park 
 Avenue than it is on the E. W. & 0., the Pennsyl- 
 vania Division, or the numerous small subsidiary 
 lines forming a part of the general system in con- 
 trihuting to the average number of i)assengers 
 carried in a car. This assumption is not only 
 unwarranted by anything in the evidence, but is 
 contrary to common observation and sense. The 
 assumption involves a statement that traveling in 
 and out of the Grand Central Station there are 
 only 10.48 (fol. 2078) i)assengers per passenger 
 car mile. xCny one with the slightest knowledge 
 of the actual traffic realizes the absurdity of this 
 assumption. 
 
 Using the foregoing successive assumptions, 
 however, the defendants present the conclusion 
 that the decimal, .107464, represents the propor- 
 tion of the car miles contributing to the return 
 on the investment in the Grand Central System 
 apportioned to the Grand Central revenue. In 
 other words, it ‘is assumed that to earn the $9,- 
 672,749 out of a total of $46,184,657.51, the relator 
 was put to an expense of only 10.7464% of tlie 
 total expense of operating its system. 
 
 Third.- — These ]iresentations, therefore, assume 
 a further pro]iosition, viz., that the capital in- 
 vested in each mile of track is the same over all 
 the system ; that the cost of maintenance is the 
 
1S5 
 
 same for the 4.44 miles as for auy similar stretch 
 of track lying in the open country, and that the 
 terminal expenses in handling passengers is pre- 
 cisely the same at the Grand Central Terminal 
 as it would be at any little obscure station on the 
 K. W. & 0. 
 
 By using this series of assumptions, wholly un- 
 warranted by any evidence in the record, wholly 
 contrary to fact, to common observation and to 
 common sense, the defendants arrive at the con- 
 clusion that to earn the $9,672,749 required an 
 operating expenditure of $3,130,317, a ratio of 
 about 32.36%, whereas that shown in the Com- 
 pany’s annual report for the entire system for the 
 j’ear is 62.69% (fol. 863). That is to say, upon the 
 most expensive portion of its entire railroad 
 system, involving the greatest outlay of capital 
 and taxes thereon, the largest expenditure for 
 maintenance of way, for signalling, and station 
 expenses, where nearly every train coming into 
 the Grand Central Terminal has to be deadheaded 
 out to Mott Haven yard, and back again; on that 
 I)articular portion of its railroad it costs only 
 about one-half to oi)erate what it does to operate 
 generally over the entire system. It would seem 
 as if absurdity could hardly go further. 
 
 When this calculation of sui)])osed exjjense in 
 earning the $9,672,749 is compared with the direct 
 and i)ositive testimony of Mr. Ingersoll, showing 
 exactly what it cost to maintain the right of way 
 over the 4.44 miles in question, wjiat the expense* 
 of signals, including actual salaries paid to em- 
 ployees was, what the expense of heating, light 
 and power at stations cost, accidents, and other 
 actual figures, we realize how illusive the pre- 
 sentation of the defemlants hecemies, especially 
 when the figures given by Mr. Ingersoll are abso- 
 lutely unchallenged by any evidence whatever. 
 
186 
 
 AVe say that the figures in the annual rei)ort 
 are not susceptible of any presentation, indicating 
 a substantial value in the intangible element of 
 this alleged special franchise without assumptions 
 which are grossly unjust to the relator, and con- 
 trary to fact. The only way in which the defend- 
 ants could work out any excess whatever of earn- 
 ings over oi)erating expenses is by the adoption 
 of the absurd .107464; based, as shown, upon 
 wdiolly erroneous or groundless hypotheses. 
 
 AVe appreciate the difficulty of making any pre- 
 sentation of the earnings and operating expenses 
 in connection with this alleged special franchise, 
 particularly as there is no definite basis for sep- 
 arating the cost of making the freight, as distinct 
 from the passenger, mail and express, earnings. 
 AATthout prejudice, however, to what we have 
 heretofore said, and without yielding our position 
 in any respect, whatever, we have endeavored to 
 work out from Mr. Odell’s figures, and from the 
 statements in the annual report, a presentation 
 which, as nearly as possible, follows the lines of 
 that of the defendants. The statement works out 
 as follows : 
 
 Gross earnings for the j’ear end- 
 ing June 30, 1899, from passen- 
 gers, mail and express business 
 on the entire system as derived 
 from the company’s report, and 
 as stated by Mr. Odell, is the 
 
 snni of $16,677,136.00 
 
 The ratio between income and o})- 
 erating ex])enses as shown by 
 the report is 62.69%. 
 
 62.69% of the sum last stated 
 would be 
 
 10,454,897.00 
 
187 
 
 Leaving net earnings on passen- 
 
 ger, mail and express, of $6, 222, 239.00 
 
 Mr, Odell’s computation of gross 
 earnings in connection vith the 
 alleged special franchise shows 9,672,749.00 
 Of which 62.69% would be 6,063,846.35 
 
 Leaving net over operating cost of 
 In this assumption we are gener- 
 ous ,to defendants and unjust 
 to relator. From the general 
 situation at this terminal it is 
 manifest that the average per- 
 centage of cost of operation to 
 gross earnings made through 
 the Park Avenue gateway is 
 greater than on the system gen- 
 erally. 
 
 To this add total trackage rental 
 paid by the New Haven Com- 
 pany from Woodlawn to G. C. 
 T. (p. 153, fol. 457) 
 
 $3,608,902.65 
 
 476,261.37 
 
 Total earnings charged against re- 
 lator .$4,085,164.02 
 
 We now come to a statement of the deductions 
 which under the theory of the defendants should 
 be made from this gross sum in order to arrive at 
 the strictly net return from the alleged special 
 franchise which capitalized fonns the value of tin* 
 intangible element. 
 
 The total value of tlie plant of The 
 New York Central and Hudson 
 Iiiver Railroad Company, cost 
 of road and ecjuipment, as found 
 on page H) of the annual rei)ort 
 and as used by the defendants, is $165,679,75.3.7 1 
 
188 
 
 From this should he deducted the 
 amount of capital invested in 
 tangible property in alleged 
 special franchise, and in real 
 estate in the Grand Central Ter- 
 minal, and at Mott Haven yard, 
 exclusive of the real estate which 
 earns a rental from ontsido par- 
 ties, and exclusive of that por- 
 tion of the Grand Central Ter- 
 minal property, viz.: 33%, on 
 which the New Haven Company 
 pays a rental as shown as fol- 
 lows : 
 
 The total assessed value of the 
 Grand Central Terminal prop- 
 erty was (p. 537, fol. 1610) .... 
 which according to stipulation is 
 67% of full value, which would 
 
 be 
 
 Portions of this property not 
 wholly used for railroad pur- 
 poses were let to tenants for an 
 aggregate rental of $20,500. 
 Capitalized at 6% the latter figure 
 represents 
 
 The remainder of 
 
 re]n’esents capital devoted to 
 wholly railroad purposes. 
 
 The New Haven Company paid 
 interest on 33% of this amount 
 under the terms of the Tripar- 
 tite lease in evidence. 
 
 H('ducting 33% of this capital or 
 
 $5,439,000.00 
 
 8.117.910.00 
 
 341,667.00 
 
 $7,776,243.00 
 
 2.566.160.00 
 
 The remainder 
 
 $5,210,083.00 
 
189 
 
 represents capital employed ex- 
 clusively by relator at the 
 Grand Central Tenninal. 
 
 The assessed value of the Mott 
 Haven yard (for use of which 
 the New Haven Company paid 
 nothing) was $1,910,458 (p. 536, 
 fol. 1608), being 67% of full 
 value, or 2,851,429.00 
 
 The total, or $8,061,512.00 
 
 represented capital invested in 
 real property outside the al- 
 leged special franchise and nec- 
 essary to the operation thereof. 
 
 To this add the value of the tan- 
 gible in the alleged special fran- 
 chise as found by the Court. . . . 4,899,.300.00 
 
 Grand total $12,960,812.00 
 
 Leaving a balance of capital in- 
 vested outside of the terminal 
 
 of $152,718,941.71 
 
 The next .step in the prol)lem is to ascertain 
 how much of the foregoing capital is assignable 
 to the use thereof for freight earnings, and the 
 use thereof for passenger, mail and exi)ress 
 earnings. 
 
 Turning again to the annual report, we find that 
 
 out of the entire earnings $46,184,657.81 
 
 the total pas.senger, mail and 
 express earnings as shown by 
 
 Mr. Odell are 16,677,136.00 
 
 or 36.1 %. 
 
 Taking ,36.1% of $152,718,941.71 
 we have 55,131,538.96 
 
190 
 
 as the proportion of capital 
 outside of the Grand Central 
 Terminal and outside of the 
 alleged special franchise re- 
 quired to achieve the passen- 
 ger, mail and express earn- 
 ings on the whole system. 
 
 It now remains to determine what proportion 
 of the last named capital is assignable to that 
 part of the passenger, mail and express earnings 
 which come through the Park Avenue gateway. 
 We have shown above that the net earnings from 
 passenger, mail and express on the whole system 
 
 was $6,222,239.02 
 
 and the net earnings from the 
 same source through the Park 
 Avenue gateway was 3,608,902.65 
 
 being a proportion of 58% of the net earnings 
 over expense of operation on passenger, mail and 
 express business on the entire system. It seems, 
 therefore, that 58% of $55,131,538.96 would rep- 
 resent that proportion of the entire capital outside 
 of the terminal used in producing that proportion 
 of the net earnings from passenger, mail and en- 
 press business which goes through the Park Ave- 
 nue gateway. 
 
 This amounts to $31,576,292.60 
 
 Upon this capital the presentation 
 of the defendants concedes that 
 the relator is entitled to a credit 
 of 6% as a fair return on the in- 
 vestment, or 1,894,577.56 
 
 which forms then the first deduction. 
 
 Outside of the taxes paid upon real estate used 
 i]i the operation of the alleged special franchise 
 at the Terminal, the defendants find that the total 
 fixed charges are the sum of $7,799,230.00 (fol. 
 
191 
 
 2085). The relator is entitled to credit for the 
 same proportion of these charges, that is to say, 
 of this amount first take 36.1% as representing 
 the proportion of fixed charges assignable to pas- 
 senger, mail and express earnings on the system 
 generally, or $2,815,522.03 and of this take 58% as 
 the proportion coming through the Park Avenue 
 gateway, which amounts to $1,633,002.78, and 
 forms the second deduction. 
 
 IVe have shown in a previous part of this pre- 
 sentation that the capital invested in the Grand 
 Central Terminal, including the tangible prop- 
 erty in the alleged special franchise, assignable 
 to relator’s operation is $12,960,812. On this 
 amount the relator is entitled to a fair return of 
 6%, or $777,648.71. 
 
 It finally remains to deduct the taxes paid by 
 the relator upon the real estate used in connection 
 
 vdth the alleged special franchise. 
 
 As shown by Mr. Bronson’s testi- 
 mony (p. 537, fob 1610) taxes 
 on the Grand Central Terminal 
 property paid in 1899 were.... $121,030.34 
 Deduct 33 per cent, paid by the 
 New Haven Company under the 
 Tripartite lease 39,940.01 
 
 Net paid by relator $81,090.3.3 
 
 To this add taxes paid on Mott 
 Haven Yard (fob 1608) not 
 shared in by New Haven Com- 
 pany 45,512.12 
 
 Taxes paid on railroad structures 
 in Park Avenue (fob 1613).... 85,960.33 
 
 Total $212,.562.78 
 
 which forms the fourth deduction. 
 
SUMMARIZING. 
 
 DEBITS. 
 
 Net earnings from New York Cen- 
 tral operation $3,608,902.65 
 
 Paid by New Haven Company for 
 trackage rental 476,261.37 
 
 Total $4,085,164.02 
 
 CEEDITS. 
 
 6 per cent, on outside 
 
 capital $1,894,577.56 
 
 Proportion of fixed 
 
 charges 1,633,002.78 
 
 6 per cent, on capital 
 in Grand Central 
 Terminal proper!}^ 777,648.71 
 
 Taxes on terminal 
 
 property 212,562.78 
 
 Total credits. . $4,517,791.83 
 
 Deducting the debits this leaves a deficit of 
 $432,627.81 which must be overcome before any 
 value more than nominal can be assigned to the 
 alleged special franchise in Park Avenue. 
 
 We submit, in conclusion, that on any fair an- 
 alysis of the figures submitted to the Referee the 
 same general result will follow. This is not say- 
 ing that the entrance to “the heart of New York 
 City” is not valuable to the relator. It is valu- 
 able; but as in the case of most valuable things 
 the relator pays full price therefor in the vast 
 expense attendant on the maintenance and opera- 
 tion of this most expensive part of its railroad 
 and in the enormous aggregate of taxes which it 
 pays into the treasury of the City of New York 
 upon its physical property used in connection with 
 the operation of said stretch of track. 
 
193 
 
 The Courts having determined that a corpora- 
 tion or person exercising an alleged special fran- 
 chise is entitled under the net earnings theory to 
 a deduction of 6% upon the value of property 
 used in connection with the alleged special fran- 
 chise from any sum which represents a surplus 
 of gross earnings over expenses of operation, the 
 impossibility of working out upon any rational 
 basis a substantial value in the intangible element 
 in the alleged special franchise operated by the 
 relator is seen from the fact that the relator does 
 not and cannot realize a return of 6% upon its 
 total capital invested in the business of transpor- 
 tation. Even though a considerable portion of 
 that capital is represented by bonds bearing a 
 rate of interest considerably below 6% it does 
 not pay and is unable to pay a dividend of 6% 
 upon the balance of its capital invested in the 
 railroad in New York State operated by it. Its 
 ability to pay five or six per cent, upon its stock 
 is due to the well-known fact that as a large stock- 
 holder in lines running west of Buffalo it derives 
 a dividend income which, in conjunction with the 
 very low percentage of net earnings on the sys- 
 tem in New York State, enables it to pay a divi- 
 dend upon its stock issue varying from four to 
 six per cent. 
 
194 
 
 THIRD POINT. 
 
 The Courts below correctly ruled that 
 Relator is entitled to have the assessment 
 equalized with the assessments of other 
 real estate not special franchises in New 
 York County. 
 
 The tax law in force at the time this assessment 
 was made required the State Board to assess at 
 full value, and the defendants testified that in 
 this case they did assess at full value (p. 140, fol. 
 419). 
 
 The right of such equalization, after much dis- 
 cussion and some contrariety of judicial opinion, 
 has. been finally settled by the Court of Appeals 
 in People ex rel. Jamaica Water Supply Company 
 V. State Board of Tax Commissioners (196 N. Y., 
 39), See discussion by Willard Bartlett, J., 
 pages 60-62. This rule has been followed in nu- 
 merous other cases which have come before the 
 courts. This course of adjusting franchise tax 
 assessments has become so universal that in 1911 
 the Legislature amended the Tax Law, Chapter 
 804, of the Laws of 1911, by giving the State 
 Board of Tax Commissioners authority, after fix- 
 ing an assessment at full value, to equalize it so 
 that the same will be upon a par with assessments 
 of other real estate not special franchises in the 
 same taxing district. 
 
 In the case at bar the stipulated fact (p. 143, 
 fol. 429) is that the percentage of realty assess- 
 ment in the County of New York to full value, 
 other than special franchise corporations, as de- 
 termined by the State Board of Equalization for 
 the year 1900, was 67. 
 
 The City of New York, intervening-defendant, 
 
195 
 
 has appealed from that part of the final order 
 which equalizes the assessment in question, its 
 contention being, as we understand it, that on its 
 presentation of the net earnings of this alleged 
 special franchise the intangible element and the 
 assessed value of the tangible property together 
 greatly exceed the assessment of $10,192,000.00 
 made by the State Board of Tax Commissioners 
 as the full value of the franchise. As we have 
 shown, this claim rests upon assumption of facts 
 and hypotheses utterly without warrant in the 
 evidence, and in fact, contrary to common sense 
 and common observation. 
 
 The Referee, and the Trial Court, specifically 
 refused to find the findings of fact covering this 
 presentation proposed by the intervening-defend- 
 ant (pp. 692-696, fols. 2075-2088). There are no 
 findings in the case that the assessed value of the 
 relator’s property was less than its true value, 
 even when reduced so as to equalize it with the 
 prevailing rate of assessment. The Court below, 
 without holding that the assessment under re- 
 view was either below or above the true value of 
 the alleged special franchise, in effect sustain d 
 it because in its opinion no facts had been ad- 
 duced on the hearing on which a re-ass(*ssment 
 could be predicated. 
 
 This situation makes the recent riding of the 
 Court of Ai)])eals in People ex rel. The fholsoif 
 d: Manhattan Pailivaif Company v. State Itnard 
 of Tax Commissioners (decision handed down 
 October 3, 1911, rejiorted 96 X. E. Rep., -1-35) pre- 
 cisely applicable to the case at bar. Chief Judge 
 Cullen says in discussing an aiipeal by tlie City 
 exactly similar : 
 
 “In the absence of such a fmding it must 
 be assumed that the State Boanl assessed 
 
196 
 
 the relator’s property at its full value 
 * # * a presumption which the evidence 
 
 in this case fully supports, and the relator 
 was entitled to the reduction.” 
 
 It would seem that further discussion of this 
 point is superfluous. 
 
 The order appealed from shoald be re- 
 versed, and the assessment canceled, or in 
 the event that the court finds that any 
 part of the assessment is legal and separa- 
 ble from the illegal portion, the order ap- 
 pealed from should be reversed and the 
 case remitted to the special term for fur- 
 ther proceedings. 
 
 Eespectfully submitted, 
 
 IRA A. PLACE, 
 Attorney for Relator- Appellant- 
 Respondent. 
 
 Alex. S. Lyman, 
 
 Of Cowisel. 
 
Argued by Alex, S. Lyman, 
 of Counsel for Kelator- 
 Appellant-Hespondeut. 
 
 IN THE 
 
 QInurt of Apppala. 
 
 State of New York. 
 
 The People of the State of 
 New York ex rel. The New 
 York Central and Hudson 
 River Railroad Company, 
 
 Relate r-Appellan t- 
 Respondent, 
 
 against 
 
 Egburt E. "W'oodbury, Benja- 
 min E. H.VLL and Frank E. 
 Perley, together constituting 
 the State Board of Tax Com- 
 missioners. 
 
 Defendants-Respondents, 
 
 and 
 
 The City of New York, 
 Intervenor-Respondent- 
 A ppelUnit. 
 
 Assessment of 1908. 
 
 BRIEF IN BEHALF OF RELATOR- 
 APPELLANT-RESPONDENT. 
 
 Statement. 
 
 These are cross appeals by the relator, and by 
 the City of New York, intervenor, from an orfl(*r 
 of the Appellate Division '^Fhird Department en- 
 tered in the office of the clerk of Albany County 
 
0 
 
 on the 26tli day of March, 1912, unanimously af- 
 firming (fol. 2248a) without opinion (fol. 2248h), 
 a final order (p. 721, fol. 2161) entered in the 
 office of the Clerk of Albany County on the sixth 
 day of March, 1911, on direction of the Hon. 
 Alden Chester, Justice, modifying, and as modi- 
 fied, affirming the assessment made in the year 
 1908 by the defendants, constituting the State 
 Board of Tax Commissioners, upon property of 
 the relator as a special franchise tax assessment. 
 The original assessment included not only the 
 alleged special franchise in Park Avenue, but 
 also the alleged franchise to occupy the subsur- 
 face of certain cross streets from 45th to 49th 
 Street east and west of Park Avenue, and also 
 included the southerly half of the railroad bridge 
 over the Harlem River, amounting in all to $12,- 
 299,400. The Referee, and the Courts below 
 have held that the inclusion of the southerly half 
 of the Harlem bridge was error, and the sum of 
 $312,461, being the value merely of the ]fiiysical 
 structures, was deducted and the balance of $11,- 
 916,939 was equalized with the assessment of real 
 property other than special franchises in the 
 County of New York for said year, viz.: by tak- 
 ing 89% thereof, amounting to $10,606,075.71 (p. 
 615, fol. 1845; final order p. 721, fol. 2168). 
 
 Statement of Facts. 
 
 We have set forth with some fullness in the 
 brief relating to the year 1900 the situation of the 
 law and the facts applying to the alleged special 
 franchise in Park Avenue. It is deemed unneces- 
 sary to repeat this statement here. As already 
 stated, the assessment for 1908 included the sub- 
 surface rights in the said streets, 45th to 49th 
 inclusive, at the Terminal, and also the southerly 
 
half of the bridge over the Harlem River. The 
 Referee, and the Courts below, held that the 
 bridge did not constitute a special franchise 
 within the meaning of the tax law, and instead 
 of ascertaining what the franchise value of the 
 southerly half of the bridge was, and adding to 
 that the ascertained value of the physical prop- 
 er! j*, and deducting the sum of these items from 
 the total assessment, they merely deducted from 
 the total assessment the value of the physical 
 property testified to on the trial. The Courts sus- 
 tained the defendant tax commissioners in assess- 
 ing the railroad in Park Avenue and the subsur- 
 face rights in the cross streets as special fran- 
 chises, and also sustained the general assessment 
 of the alleged special franchise in Park Avenue 
 on the same ground as in the 1900 case, viz., that 
 there was no sufficient evidence before the Court 
 to justify a re-appraisal, and that, therefore, 
 there was a failure on the part of the relator to 
 produce evidence clearly indicating that the as- 
 sessment made by the Tax Board was in any 
 event excessive, or more than the true value of 
 the property. 
 
 Another distinction between this case and that 
 for 1900 should be noted. In the 1900 case the 
 defendant Tax Commissioners were sworn as 
 witnesses, and testified to their procedure in fix- 
 ing the Park Avenue assessment, showing the 
 method, or rather lack of method which they fob 
 lowed. The Tax Commissioners for the year 190'^ 
 were duly served with subpoenas to attend and 
 testify before the Referee. These sub])oenas 
 were vacated on their application b}' the Supreme 
 Court, Mr. Justice Betts sitting (f). 493, fol. 
 1477) on the ground that whatever information 
 the Court was entitled to as to the modus oper- 
 
4 
 
 andi followed by the Tax Commissioners in fixing 
 the assessment, was obtainable from an amended 
 return. It will be noted that the original return 
 (p. 44, fob 130) entirely fails to disclose the 
 method or modus operandi, if any, followed by 
 the Tax Commissioners. An amended return, 
 pursuant to the decision of Mr. Justice Betts, 
 was filed l)y the Defendant Tax Commissioners 
 (p. 51, fob 151), but it differs only from the or- 
 iginal return l)y adding a quantity of words which 
 have no meaning beyond conveying generalities 
 and which, therefore, do not in the slightest re- 
 spect enlighten the Court as to the method pur- 
 sued. Further facts will be stated under the re- 
 spective points. 
 
 FIRST POINT. 
 
 The State Board of Tax Commissioners 
 was, and is, withont jurisdiction, because 
 the railroad of the Relator in Park Ave- 
 nue had been built, maintained and oper- 
 ated long prior to the coming into exist- 
 ence as a public street of the strip of land 
 on which it was so constructed, maintained 
 and operated, and the avenue when opened 
 was opened subject to the prior rights of 
 the railroad. 
 
 Exactly the same statement of facts, argument 
 and citation of authorities which is contained un- 
 der the I^'irst Point of the 1900 lirief is applicable 
 here, and to avoid mere mechanical repetition we 
 
o 
 
 respectfully refer the Court to the First Point i ' 
 the 1900 brief. 
 
 We also invoke the proposition therein set 
 forth with reference to the admittedly erroneous 
 inclusion of the southerly half of the Harlem 
 bridge in the assessment, the Tax Commission- 
 ers ha\dng afforded no basis of separation in their 
 return, that illegal element having been blended 
 in a single inseparable assessment, the whole 
 must fall as illegal. 
 
 SECOND POINT. 
 
 The State Board of Tax Commissioners 
 having presumably adopted the theory of 
 earnings in determining the intangible 
 element in special franchise assessments 
 in New York County, their assessment of 
 the intangible element in the alleged 
 Special Franchise in Park Avenue should 
 be tested by the application of that theory. 
 Relator's findings on this subject were 
 erroneously refused. 
 
 As has been shown in the brief for the year 
 1900, while the aflirmance was nnanimons dis- 
 cussion of the subject is still open, since relator 
 presented certain requests to the Referee and the 
 Court at special term which were refused (fols. 
 1903-1908, 1910-1912, 1933-1950), and exception 
 to such refusal duly taken (fols. 2218-2223). 
 
 In a general way as to the alhjged special fran- 
 chise in Park Avenue itself, as distinct from the 
 
(■> 
 
 subsurface rights in the cross streets, and the 
 southerly halt of the ilarlem River bridge, our 
 argument under this point is substantially the 
 same as under the Second Point in the brief for 
 the year 1900, herewith submitted. There are, of 
 course, some differences of fact, though not such 
 as to affect the general result. 
 
 Mr. Hoyt testified that the value of the tangi- 
 ble property in Park Avenue as distinct from the 
 structures under the surface of the cross streets, 
 and the railroad bridge, was the sum of $5,294,- 
 100 (p. 116b, fob 348e). The addition over the 
 value given for the year 1900 is in part due to 
 electrification and to new structures placed in the 
 interim over the lower portion of Park Avenue 
 incident to the reconstruction of the Grand Cen- 
 tral Terminal. With reference to the structures 
 erected within the street lines and included within 
 the assessment for the so-called subsurface 
 rights Mr. Hoyt prepared a map, which was re- 
 ceived in evidence, and marked Exhibit T-08, and 
 is reproduced in the Appendix, (p. 932). The 
 total value of these structures excluding the 
 street viaducts, the property of the City, and 
 which are paid for by the City under the terms of 
 the contract, and the Act of 1903, reaches the sum 
 of $234,^576 (p. 126, fob 377). 
 
 These computations of Mr. Hoyt were not ques- 
 tioned by any one, and were found by the Referee 
 and the Court as the value of the structures un- 
 der consideration (p. 556, fob 1667). 
 
 Mr. Hoyt also valued the structures comprising 
 the southerly half of the Harlem River l)ridge, 
 and lying between the southerly bulkhead line 
 and tlie middle line of the draw ]uer, which it a])- 
 pears is a little north of the dividing line ])etween 
 the Borough of The Bronx and the Borough 
 Manhattan, at the sum of $312,461 (p. 127, fob 
 
381), wliicli was the figure found by the Referee 
 and the Court (p. 556, fob 1666). "We.have then 
 a total value of tangible property iuvolved in this 
 
 assessment of 
 
 Structure in Park Avenue „....$5,294,100 
 
 Structures under cross streets 234,676 
 
 Southerly half of Harlem bridge 312,461 
 
 $5,841,237 
 
 The total final assessment of the de- 
 fendant Tax Commissioners was $12,299,400 
 
 Deduct from this total value tangi- 
 
 ble property 5,841,237 
 
 And the difference of $ 6,458,163 
 
 represents the value, as near as it can be obtained, 
 which was placed by the Tax Board upon the in- 
 tangible elements in these special franchises. 
 
 Judging from the assessments made by the 
 Board for the prior j'ears beginning with 1900, 
 the plain inference is that this sum indicates sul)- 
 stantial increases in the estimate of the intangi- 
 ble element on the part of the Board for the rail- 
 road proper in Park Avenue from 45th Street to 
 a point near 1.33rd Street, and also includes what- 
 ever valuation was made by the Board of the in- 
 tangible element both in the southerly half of the 
 Harlem bridge, and in the so-called subsurface 
 rights in the cross streets from 45th to 49th 
 street. Just how these sums are to be ai)por- 
 tioned, or were ay)portioned by the defendant 
 Tax Commissioners does not appear. The R(‘- 
 lator exhausted its legal remedies to secure evi- 
 dence of the facts; its subpoenas were vacated, 
 and it was relegated to an amended rcdiirn, which 
 is no return at all, and does not indicate in the 
 slightest way the method followed by the Board, 
 or the various items, or the anionnt of the items, 
 
8 
 
 Trhicli entered into the sum total which they fixed. 
 
 The Court of Appeals has twice held that the 
 Court is entitled to have such information fur- 
 nished in the return to the writ. 
 
 People ex rel. Buffalo Gas Co. v. State 
 Board of Tax Com’rs, 199 N. Y., 162; 
 People ex rel. Lehigh Valley E. R. Co. vs. 
 Same, 199 N. Y., 167. 
 
 We beg to call attention to the observations, 
 without repeating them, which we made in regard 
 to the burden of proof in the 1900 brief. A writ 
 of certiorari is a mere mockery, and it is impos- 
 sible to obtain any review of an assessment by 
 the defendant Tax Commissioners if the views of 
 the learned Referee, and the Courts below, are 
 to prevail. The ruling of the Court of last re- 
 sort debars us from producing any expert opin- 
 ion evidence of the value of these intangible 
 rights, and every item which would throw any 
 light upon the value of these intangible rights as 
 drawn from the actual operations of the Com- 
 pany are before the Court. 
 
 Mr. Foulds of the Auditing Department, in the 
 present case made a presentation of the earnings 
 of this stretch of track on the mileage basis, citing 
 the same elements of computation, as in the 1900 
 case. That statement is inserted at page 132, 
 folios 394 to 412 of the record, and is as follows: 
 
9 
 
 Statement showing method of ascertaining 
 
 GROSS EARNINGS OF THAT PORTION OF. THE NeW 
 
 York & Harlem Eailroad in Park Avenue 
 BETWEEN -lOTH STREET AND 133rD StREET, AND 
 AMOUNT OF SUCH EARNINGS FOR THE YEAR END- 
 ING December 31, 1907. 
 
 First : Earnings from operation of 
 N. Y. C. & H. K. R.R. Co. 
 
 (a) Passenger earnings. 
 
 Total passenger earnings $24,133,013.99 
 
 Commutation, school and fam- 
 ily ticket earnings 1,433,795.62 
 
 Earnings from single trip, 
 round trip and mileage 
 
 passengers carried 22,699,218.37 
 
 Total number of single trip, 
 round trip and mileage pas- 
 sengers carried 25,687,890. 
 
 Total number of miles trav- 
 eled by total number of pas- 
 sengers carried 1,389,340,246 
 
 Earnings per mile per (ordi- 
 nary) passenger $.01911 
 
 Total number commutation 
 
 passengers carried 9,468,836. 
 
 Total number of miles trav^eled 
 by total number commutation 
 
 passengers carried 201,768,381. 
 
 Earnings per mile per commu- 
 tation passenger ^ $.00711 
 
 Distance from 45tb St. to 133d 
 
 St - - 4- 4.44 miles 
 
 Number of ordinary pas- 
 sengers on N. Y. C. Lines 
 at C. C. S. going and com- 
 ing - 3,597,516. 
 
 Same, 125tb Street 448,920 
 
10 
 
 Number of commutation pas- ' 
 
 sengers on N. Y. C. Lines at 
 G. C. S. going and com- 
 ing 5,980,990. 
 
 Same, 125tli Street 306,249. 
 
 Earnings from commutation 
 
 sengers $308,760.81 
 
 Earnings from commutation 
 passengers 189,703.04 
 
 (a) Total passenger earnings $498,463.85 
 
 (b) Mail earnings. 
 
 Amount paid by Government 
 per mile of Road. 
 
 New York and Buffalo route $4,191.47 
 
 New York and Cliatliam route 139.14 
 
 Railway Mail Service, N. Y. to 
 Buffalo 546.97 
 
 Total $4,877.58 
 
 Earnings per mile of road $4,877.58 
 
 Number miles of track in- 
 volved 4.44 
 
 Total mail earnings $21,656.46 
 
 (c) Earnings from express. 
 
 Total earnings on N. Y. C $3,131,127.95 
 
 Total miles of railroad in 
 
 volved 3,195.77 
 
 Amount of earnings v $4,350.19 
 
 (d) Excess baggage. 
 
 Total earnings on N. Y. C $203,181.91 
 
 Total miles of railroad in- 
 volved 3,195.77 
 
 Amount of earnings $282.29 
 
 Second: Earnings from operation 
 N. Y., N. IT. & 11. R.R. Co. 
 
 (a) Passenger earnings. 
 
 Total payments on passengers 
 
 carried $787,863.60 
 
11 
 
 Number of miles 43rd St. to 
 
 Woodlawn Jimction 12.4.3 
 
 Total passenger ijayments $281,425.13 
 
 (b) Mail, express and baggage $45,196.01 
 
 Total payments $16,144.03 
 
 Recapitulation. 
 
 From N. Y. C. & H. R. 
 
 R. R. Co. 
 
 Passenger earnings $498,463.85 
 
 Mail earnings 21,656.46 
 
 Express earnings 4,350.19 
 
 Excess baggage 282.29 
 
 $524,752.79 
 
 From N. Y., N. 11. & H. 
 
 R. R. Co. 
 
 Passenger earnings $281,425.13 
 Mail, express and 
 
 baggage 16,144.03 
 
 $297,569.16 
 
 Grand total — $822,321.95 
 
 Mr. Odell’s testimony with reference to esti- 
 mate of passenger earnings through the Park 
 Avenue gateway was given for the year 1908 on 
 the same theory as for the year 1900, and the dis- 
 cussion under tliat year will apply equally here. 
 Under the basis which he adopts, the total earn- 
 ings coming through the Park Avenue gateway 
 for the year ending December 31, 1907, were $9.- 
 511,725 (Appendix, page 1103, fol. 3307), out of a 
 total earnings from passenger, mail and express 
 of $36,190,744. Presenting Mr. Odell’s figures 
 upon the mileage j)roportion attributable to the 
 4.44 miles of railroad constituting the alleged 
 spiM’ial franchise in Park Avenue, the statement 
 is made up as follows: 
 
12 
 
 Earnings per passenger mile as de- 
 rived from the Company’s annual 
 report ending December 31, 1907 : 
 
 (a) Ordinary passengers including 
 
 mail and express $.0233988 
 
 (b) Commutation passengers 
 
 (school and family tickets) $.00711 
 
 No. of ordinary passengers Grand 
 Central Terminal : 
 
 T.ocal 3,043,207 
 
 Inter-line, East of Ni- 
 agara Frontier 290,953 
 
 Inter-line, West of Ni- 
 agara Frontier 263,356 
 
 3,597,510 
 
 No. commutation passengers Grand 
 
 Central Terminal 6,287,239 
 
 3,597,516 X 4.44 x .0233988= $373,748.35 
 
 6,287,239 x 4.44 x .00711 = $195,965.69 
 
 $569,714.04 
 
 Compare this with Mr. Foulds’ presentation of 
 earnings from New York Central and Hudson 
 River Railroad Company operation for the year 
 ending December 31, 1907, to wit, $524,752.79. 
 
 As we have already pointed out. Relator was 
 debarred from examining the defendant Tax 
 Commissioners in this case as to the methods 
 adopted by them in making the assessments in 
 question, or as to the separate valuation of the 
 items included in the total and, as Ave have also 
 pointed out, the return, and amended return of 
 the defendant Tax Commissioners contain no en- 
 lightenment on the sulqect. From 1900 to 1906 
 while Messrs. Priest, Stearns and Ilalpin were 
 members of the Board, we have their testimony 
 in the 1900 record, argued herewith, tliat the 
 
13 
 
 Board followed the same method in New York 
 County special franchise assessments, viz., of 
 taking a percentage not exceeding live of the 
 gross receiiDts, and dividing by the tax rate, the 
 quotient being the value of the intangible ele- 
 ment, the apparent theory of the Commissioners 
 being that the owner of a special franchise ought 
 to pay as taxes the tax rate applied to the value 
 of the tangible property plus 5%, or less, of its 
 gross receipts from the operation of such fran- 
 chise. As the assessments in question from the 
 years 1900 to 1908 have moved upward steadily 
 from year to year in response to an assumed in- 
 crease in the amount of business done over the 
 alleged special franchise, we think it fair to as- 
 sume that the members comprising the defendant 
 Board of Tax Commissioners accepted as an in- 
 heritance the assessments of the former Board, 
 and have simply increased them somewhat from 
 year to year in response to the idea of a sup- 
 posed increase in traffic. 
 
 Upon the assumption, therefore, that the gross 
 earnings basis may be used to test the assessment 
 in the case at bar, and upon the further assump- 
 tion that nothing shall be deducted whatever for 
 oj^erating expenses, although the latter are con- 
 cededly very heavy, if we take the gross income 
 apportioned on the mileage basis and ai)ply the 
 principle of assessment above described, the fol- 
 lowing presentation results : 
 
 Gross income (Foulds) New Yoi’k 
 
 Central operation (fob 412) 
 
 Paid by New Haven Company for 
 trackage 
 
 280,0. '34.89 
 
 Total gross income.^ $828,438.1 1 
 
14 
 
 5% of the foregoing is $41,421.9055 
 which divided by the tax rate for 
 1908 (fol. 1671), viz., .0161407 pro- 
 duces as the value of the intangible $2,566,301.00 
 To which add the value of the 
 tangible as testified to by Mr. Hoyt 
 and as found by the Court below 5,294,100.00 
 
 Total assessment at full value $7,860,401.00 
 
 which when equalized by taking 
 the found ratio (fol, 1670) of 89% 
 produces an equalized assessment 
 
 of $6,973,756.89 
 
 If we follow the computations of the defend- 
 ants’ expert, Mr. Odell, apportioning to the al- 
 leged special franchise its share on the mileage 
 basis, we obtain: 
 
 Gross income. New York Central 
 
 operation $569,714.04 
 
 Paid by New Haven Company for 
 trackage rights 286,654.89 
 
 Total gross income $856,368.93 
 
 5% of the last mentioned amount 
 
 is $42,818.4465 
 
 dividing this amount by the tax 
 rate of .0161407 we get as the 
 
 value of the intangible $2,652,824.00 
 
 to which add the value of the tan- 
 gible as found by the Court below 5,294,100.00 
 
 which makes the total assessment 
 
 at full value $7,946,924.00 
 
 equalizing it by taking 89% there- 
 of as found by the Court for the 
 year in question we get an equal- 
 ized assessment of $7,072,772.36 
 
15 
 
 which we respectfully submit is the utmost pos- 
 sible assessment which the facts upon the assump- 
 tion stated will warrant. 
 
 Upon the same basis and with the same ele- 
 ments of computation as were placed before the 
 Court in the proceeding for 1900, the Relator 
 proved by the testimony of Mr. 11. L. Ingersoll, 
 the expenses involved in operating the alleged spe- 
 cial franchise on Park avenue. The figures for 
 maintenance of way, station employes, heat, light 
 and supplies at stations, towermen and accidents 
 being the actual expenses incurred, and the ex- 
 pense of moving passenger trains and shop trains 
 being in itself not susceptible of precise statement 
 is based upon an average derived from the gen- 
 eral operations of the Relator’s railroad system, 
 an average which, as we have shown in the 1900 
 brief, is, if anything, unfavorable to the Relator, 
 since the expense of moving these trains is larger 
 than the average by reason of the increased num- 
 ber of trainmen necessary on the suburban trains, 
 and the frequent stops and delays involving loss 
 of trainmen’s wages to the Relator, caused by 
 the frequent congestion which occurs in a crowded 
 terminal. Mr. Ingersoll ’s testimony is as follows: 
 
 Operating expenses for the year encling Decem- 
 ber .31, 1907, are as follows (p. 224, fob 070) : 
 
 “Expenses of Harlem Line, between 45th Street 
 
 and 133rd Street. 
 
 Calendar 
 Year 1907. 
 
 Maintenance of way $2H3,077.17 
 
 Station employes 15,t)70.87 
 
 Heat, Idght and suf)plies 18,741.71 
 Towennen 43,822.93 
 
16 
 
 Cost of passenger cars, .... 242,777.65 
 
 Cost of slio}) ears 149,785.47 
 
 Accidents 102,549.78 
 
 Executive expense 85,852.56 
 
 $941,408.14 
 
 If we atteinj)t to deduct the total of $941,408.14 
 from the gross income for the year ending De- 
 cember 31, 1907, viz., $822,321.95, we have a defi- 
 cit in operating expenses alone of $119,086.19, 
 The very great addition in the expense of mov- 
 ing trains, both passenger and shop, is evident if 
 this statement he compared with that produced 
 for the preceding years, and this was explained 
 by Mr. Ingersoll as l)eing due to the very great 
 increased expense in the electric operation of this 
 stretch of road. He thought that it cost possibly 
 100 per cent, more for electric engine service than 
 for steam engine service (fob 673). As the oper- 
 ation by electricity was forced upon the railroad 
 company l)y the legislature (Ch. 425, L. 1903, p. 
 831, fol. 2491), due notice of this large increase in 
 operating expenses seems particularly appropri- 
 ate. 
 
 Mr. Ingersoll testified on this subject as follows 
 ip. 225, fol. 673) : 
 
 “Q. Just explain to the Court what this 
 electrical service is of which you speak? A. 
 Well, there was formerly just railroad tracks 
 there with signals. Of course the permanent 
 way was constructed in a manner that has 
 been testified to here and described. The 
 trains were hauled by an ordinary steam loco- 
 motive, which was a complete motive ])ower 
 unit in itself. The electric trains are hauled 
 by the motor which in the first instance costs 
 prol)a])ly nearly double the cost of steam loco- 
 motives, and it is dependent for its power 
 
17 
 
 upon a very elaborate transmission system 
 and third rail and a very costly i)Dwer gen- 
 erating station. Of course the operating ex- 
 l)ense and maintenance expense of that plant 
 is distributed over the load that it carries. 
 The load that these power plants carry and 
 the transmission lines is the load of the elec- 
 tric division, the electric engine seiwice and 
 the electric train service of the electric divi- 
 sion.” 
 
 In the 1900 brief we have noticed the criticisms 
 of the Referee upon the Relator’s method of pre- 
 senting these expenses, which we need not repeat 
 here. It will not be questioned that the expenses 
 are at any rate heavy. According to the annual 
 report of the Relator to its stockholders for the 
 year ending December 31, 1907, which the de- 
 fendants placed before the Court, the operating 
 ratio was 77.06%. As this stretch of track is one 
 of the most expensive to maintain in the country, 
 it is doing an obvious injustice to the Relator to 
 use this percentage. However, applying it to the 
 gross earnings of this alleged special franchise 
 of $828,438.11, as testified to by Mr. Foulds, i1 
 appears that the cost of operation would be not 
 less than $638,394.41; this would yield a surplus 
 or net earnings of $190,043.70. If we a[)f)ly the 
 theory of net earnings as set forth by Judge Bart- 
 lett in the opinion of the Court of Ajjpeals in the 
 Jamaica Water Supply Company case, it would 
 appear that the Relator is, at least, entitled to a 
 return of 6% calculated upon the value of the tari- 
 gible property nec(*ssarily used in the operation 
 of the alleged special franchise. The value of 
 such tangible jmoperty in the alleged special fran- 
 chise itself, and exclusive of the terminal property 
 and the Mott Haven yanl, or any proportion 
 
IS 
 
 thereof, which is also used in securing these earn- 
 ings is, as found hy the Court, the sum of $5,- 
 294,100. Six per cent, upon the sum last stated 
 amounts to $317,646, indicating a deficit of $127,- 
 602.30, which must be overcome before any sub- 
 stantial value can be asserted to be attached to 
 the intangible element in the alleged special fran- 
 chise. 
 
 If we take Mr. Odell’s computations of the 
 gross earnings through the Park Avenue gateway 
 and apportion them on the mileage basis, which 
 he testified was the only proper basis, we should 
 still have a deficit. 
 
 The Intervening-Defendant, the City of New 
 York, presented to the Referee, and the Court be- 
 low, in this case, as in the 1900 case, a computa- 
 tion of the gross earnings made through the Park 
 Avenue gateway, and of the supposed expense to 
 the Relator of achieving those earnings, and of 
 the deductions to which the Relator is entitled be- 
 fore any valuation can be predicated upon the in- 
 tangible element. The presentation for the year 
 1908 is upon the same basis, and using the same 
 elements of calculation as in that of 1900., To 
 avoid needless repetition, w^e beg to refer the 
 Court to that portion of our brief for the year 
 1 900 which deals with this presentation. 
 
 As both records are before the Court, some com- 
 parison of results will prove enlightening. For 
 the year 1900, for example, the defendants’ wit- 
 ness, Mr. Odell (See 1900 record, p. 696, fob 2088), 
 finds that out of a total passenger, mail and ex- 
 press earnings of $16,677,136 derived from the 
 entire system of railroads operated by the Relator 
 and earned in 1899, $9,672,749 represents the pro- 
 portion thereof by reason of the use, among other 
 instrumentalities of this alleged special franchise; 
 
19 
 
 that is, derived through the Park Aveuue gate- 
 way. Ill the year 1907 (See record for 1908, Ap- 
 pendix, page 1103), he finds that out of a total 
 gross earnings for the system of railroads oper- 
 ated liy the Relator of $36,190,744 only $9,511,725 
 were obtained through the use of the alleged spe- 
 cial franchise in Park Avenue. 
 
 This is a remarkable falling olf, both absolutely 
 and relatively. It would seem as if this alleged 
 special franchise, leading into the “heart of New 
 York,” was not quite so valuable as the defend- 
 ants would like to have the Court think it. 
 
 For the year 1900, upon a gross income, as 
 stated, of $9,672,749 the defendants worked out 
 a valuation of the intangible element in the al- 
 leged special franchise of $69,935,616, whereas for 
 the year 1908, with gross earnings of $9,511,725 
 about $160,000 less than in 1900, the value of the 
 intangible element had dropped to $33,506,133 (p. 
 706, fol. 2117). Or, for the purpose of earning 
 substantially the same sum it was only half as 
 valuable in 1908 as in 1900. 
 
 It is hardly surprising that neither the Referee, 
 nor the Court, placed any value upon this pre- 
 sentation, and refused all of the findings pro- 
 posed by the defendants with reference thereto. 
 
 In our brief for 1900 we attemj)ted a compari- 
 son of the earnings of this alleged special fran- 
 chise upon the basis adoi)ted by the defendants. 
 Assuming without conceding, the i)ostuIates 
 wliich they provided, excei)t instead of taking the 
 loaded ear mileage theory without distinction be- 
 tween passenger and freight operation, we have 
 applied the ratio as set forth in the Company’s 
 report to its stockhohlers, between gross earn- 
 ings and oi)erating expenses, which for the year 
 1907 was 77.06%. If there is any value whatever 
 in this theon’ of presentation we submit that this 
 
20 
 
 ratio is the fairest and most reasonable approxl 
 mation that can be taken, there l)eing no sepa- 
 rate acconnt kept, or any acconnt possible to be 
 kept, of the expenses of making the freight, as 
 distinct from the passenger, mail and express, 
 earnings. 
 
 Repeating, therefore, the presentation that was 
 made for the year 1900, and making the proper 
 changes in the figures, the statement works ont 
 as follows : 
 
 Gross earnings for the year end- 
 ing December 31, 1907, from 
 passengers, mail and express 
 business on the entire system as 
 derived from the company’s re 
 port, and as stated by Mr. Odell, 
 is the sum of $36,190,744.00 
 
 The ratio between income and op- 
 erating expenses as shown by 
 the report is 77.06%. 
 
 77.06% of sum last stated 
 would be 27,888,588.33 
 
 Leaving net earnings on passen- 
 ger, mail and express, of $8,302,155.67 
 
 ]\fr. Odell’s computation of gross 
 earnings in connection with the 
 alleged special franchise shows ... 9,511,725.00 
 Of which 77.06% would be 7,329,735.29 
 
 T.,eaving net over operating cost of $2,181,989.71 
 Tn this assumption we are gener- 
 ous to defendants and unjust 
 to relator. From the general 
 situation at tliis terminal it is 
 manifest tliat the average per- 
 centage of cost of operation to 
 
21 
 
 gross earnings made through 
 the Park Avenue gateway is 
 greater than on the system gen- 
 erally. 
 
 To this add trackage rental from 
 "Woodlawn to G. C. T. paid by 
 the Xew Haven Company (fol. 
 
 410) $802,504.58 
 
 Total earnings charged against re- 
 lator $2,984,494.29 
 
 AVe now come to a statement of the deductions 
 which under the theory of the defendants should 
 be made from this gross sum in order to arrive at 
 the strictly net returns from the alleged special 
 franchise which capitalized forms the value of the 
 intangible element. 
 
 The total value of the plant of The 
 New York Central and Hudson 
 River Railroad Company, cost 
 of road and equipment, as found 
 on page 44 of the annual report 
 and as used by the defendants, is $215,869,940.51 
 From this should be deducted tlie 
 amount of capital invested in 
 tangible property in alleged 
 special franchise, and in real 
 estate in the Grand Central Ter- 
 minal, and at Mott Haven yard, 
 exclusive of the real estate which 
 earns a rental from outside par- 
 ties, and exclusive of that por- 
 tion of the Grand Central Ter- 
 minal property, viz: 3.3%, on 
 which the New Haven Company 
 pays a rental as shown as fol- 
 lows : 
 
00 
 
 The total assessed value of the 
 Grand Central Terminal prop- 
 erty was (p. 537, fols. 1609- 
 
 1612) $14,736,000.00 
 
 which according to stipulation is 
 89% of full value, which would 
 be , 16,355,056.00 
 
 Portions of this property not 
 wholly used for railroad pur- 
 poses were let to tenants for an 
 aggregate rental of $74,237.61. 
 
 Capitalized at 6% the latter figure 
 
 represents 1,237,294.00 
 
 The remainder of $15,117,762.00 
 
 represents capital devoted to 
 wholly railroad purposes. 
 
 The New Haven Company paid 
 interest on 33% of this amount 
 under the terms of the Tripar- 
 tite' lease in evidence. 
 
 Deducting 33% of this capital or 4,988,861.00 
 
 The remainder 
 
 represents capital employed ex- 
 clusively by relator at the 
 Grand Central Terminal. 
 
 The assessed value of the IMott 
 Haven yard (for use of which 
 the New Haven Company paid 
 nothing) was $2,539,800 (p. 539, 
 fob 1617), being 89% of full 
 
 value, or 
 
 The rental received for non-rail- 
 road uses is $1,835, which, capi- 
 talized at 6%, represents a de- 
 duction of $30,583, leaving net 
 capital investment in Mott 
 Haven yard of 
 
 $10,128,901.00 
 
 2,853,708.00 
 
 2,823,125.00 
 
 The total, or. 
 
 $12,952,026.00 
 
represejilted capital invested in 
 real property outside the al- 
 leged special franchise and nec- 
 essary to the operation thereof. 
 
 To this add the value of the tan- 
 gible in the alleged special fran- 
 chise as found by the Court 5,294,100.00 
 
 This amount is $18,246,126.00 
 
 Leaving a balance of capital in- 
 vested outside of the terminal 
 of - - $197,623,814.51 
 
 The next step in the problem is to ascertain 
 how much of the foregoing capital is assignable 
 to the use thereof for freight earnings, and the 
 use thereof for passenger, mail and express 
 earnings. 
 
 Turning again to the annual report, we find that 
 
 out of the entire earnings $98,369,059.55 
 
 the total passenger, mail and 
 express earnings as sho^^^^ by 
 
 ]\fr. Odell are , 36,190,744.00 
 
 or 36.77%. 
 
 Taking 36.77% of $197,623,814.51 
 
 we have 
 
 as the proportion of capital 
 outside of the Grand Central 
 Terminal and outside of the 
 
 72,527.999.93 
 
 alleged special franchise re- 
 quired to achieve the passen- 
 ger, mail and express earn- 
 ings on the whole system. 
 
 Tt now remains to deteniiine what f)roportinn 
 of the last named capital is assignable to that 
 part of the passenger, mail and expi-ess earnings 
 
24 
 
 which come through the Park Avenue gateway. 
 AVe have shown above that the net earnings from 
 passenger, mail and express on the whole system 
 
 was $8,302,155.67 
 
 and the net earnings from the 
 same source through the Park 
 Avenue gateway was 2,181,989.71 
 
 being a proportion of 26.2% of the net earnmgs 
 over expense of operation on passenger, mail and 
 express business on the entire system. It seems, 
 therefore, that 26.2% of $72,527,999.93 would rep- 
 resent that proportion of the entire capital out- 
 side of the terminal used in producing that pro- 
 portion of the net earnings from passenger, mail 
 and express business which goes through the 
 Park Avenue gateway. 
 
 This amounts to $19,202,335.98 
 
 Upon this capital the presentation 
 of the defendants concedes that 
 the relator is entitled to a credit 
 of 6% as a fair return on the 
 
 investment, or 1,152,140.16 
 
 which forms then the first deduction. 
 
 Outside of the taxes paid upon real estate used 
 in the operation of the alleged special franchise 
 at the Terminal, the defendants find that the total 
 fixed charges is the sum of $12,850,298.00 (fob 
 2127). The relator is entitled to credit for the 
 same proportion of these charges, that is to say, 
 of this amount first take 36.7% as representing 
 the proportion of fixed charges assignable to pas- 
 senger, mail and express earnings on the system 
 generally, or $4,716,059.37 and of this take 26.2% 
 as the proportion coming through the Park Ave- 
 nue gateway, which amounts to $1,235,607.55, and 
 forms the second deduction. 
 
VCe have shown in a previous part of this pre- 
 sentation that the capital invested in the Grand 
 Central Terminal, including the tangible prop- 
 erty in the alleged special franchise, assignable 
 to relator’s operation is $18,246,126. On this 
 amount the relator is entitled to a fair return of 
 6%, or $1,094,767.56. 
 
 It finally remains to deduct the taxes paid by 
 the relator upon the real estate used in connection 
 
 with the alleged special franchise. 
 
 As shown by Mr. Bronson’s testi- 
 mony (fol. 1612) taxes on the 
 Grand Central Terminal prop- 
 erty paid in 1907 were $229,240.85 
 
 Deduct 33 per cent, paid by the 
 New Haven Company under the 
 Tripartite leas^i 75,649.48 
 
 Net paid by relator $153,581.37 
 
 To this add taxes paid on Mott 
 Haven Yard not shared in by 
 New Haven Company (fol. 
 
 1617) 40,994.14 
 
 Total $194,585.51 
 
 which forms the fourth deduction. 
 
 SUMMARIZING. 
 
 DEBITS. 
 
 Net earnings from New York Cen- 
 tral operation 
 
 Paid by New Haven Company for 
 trackage rental 
 
 $2,181,989.71 
 
 802,504.58 
 
 $2,984,494.29 
 
 Total 
 
20 
 
 CKEDITS. 
 
 6 per cent, on outside 
 
 capital $1,152,140.16 
 
 Proportion of fixed 
 
 charges 1,235,607.55 
 
 6 per cent, on capital 
 in Grand Central 
 Terminal property... 1,094,767.56 
 Taxes on terminal 
 property 194,585.51 
 
 Total credits $3,677,100.78 
 
 Deducting the debits this leaves a deficit of 
 $692,606.49 which must be overcome before any 
 value more than nominal can be assigned to the 
 alleged special franchise in Park Avenue. 
 
 We submit, in conclusion, that on any fair an- 
 alysis of the figures submitted to the Referee the 
 same general result will follow. This is not say- 
 ing that the entrance to “the heart of New York 
 City” is not valuable to the relator. It is valu- 
 able; but as in the case of most valuable things 
 the relator pays full price therefor in the vast 
 expense attendant on the maintenance and oper- 
 ation of this most expensive part of its railroad 
 and in the enormous aggregate of taxes which it 
 ])ays into the treasury of the City of New York 
 upon its physical property used in connection witli 
 the operation of said stretch of track, and upon 
 which the assessments for taxation increase year- 
 ly by leaps and bounds. 
 
 The Courts having determined that a corpora- 
 tion or person exercising an alleged special fran- 
 chise is entitled under the net earnings theory to 
 a deduction of 6% upon the value of property 
 used in connection with the alleged special fran- 
 chise from any sum which represents a surplus 
 
of gross earning over expenses of operation, the 
 impossibility of working out upon any rational 
 basis a substantial value in the intangible element 
 in the alleged special franchise operated by the 
 relator is seen from the fact that the relator does 
 not and cannot realize a return of 6 % upon its 
 total capital invested in the business of transpor- 
 tation. Even though a considerable portion of 
 that capital is represented by bonds bearing a 
 rate of interest considerably below 6% it does 
 not pay and is unable to pay a dividend of 6% 
 upon the balance of its capital invested in the 
 railroad in New York State operated by it. Its 
 ability to pay five or six per cent, upon its stock 
 is due to the well-known fact that as a large 
 stockholder in lines running west of Buffalo it 
 derives a dividend income which, in conjunction 
 with the very low percentage of net earnings on 
 the system in New York State, enables it to pay a 
 dividend upon its stock issue varying from four 
 to six per cent. 
 
 At the request of counsel for the State, the 
 assessment rolls of property on both sides of 
 Park Avenue from 45th Street to 133rd Street 
 were offered and received in evidence over tlie 
 objection of the Relator, and sulqect to its motion 
 to strike out the same, on which decision at the 
 time was resented (p. 515, fol. 1541). The Ref- 
 eree in his opinion (p. 710, fob 2157) sustains tin* 
 objections of the Relator and grants its motion 
 that this evidence shoidd be stricken out (fol. 
 2150). "We do not know whether the defendants 
 will on their appeal di.scuss this ruling. The 
 grounds in support of Relator’s objection to tin* 
 reception of tbe evidence are pr(*tty fully stated 
 in tbe record in the discussion of counsel which 
 prefaced their introduction (pp. 400 to 514; folios 
 
28 
 
 1487-1539). As indicated in the opinion of the 
 Referee, merely the block and lot numbers of 
 these lots abutting on both sides of Park Avenue 
 were given, so it cannot be determined what lands 
 are involved in the alleged assessments. The ar- 
 gument in support of the introduction of this line 
 of evidence, so far as it may be gathered from 
 statements on the record is, summarily stated, 
 that if the Relator was driven off Park Avenue at 
 this late day and had to get an inlet to its termi- 
 nal at 42nd Street over private property it might 
 have to pay a very large sum, and that such sum 
 as it might have to pay on that hypothesis might 
 be shown by the value of these lots abutting on 
 Park Avenue, and that its present right to be in 
 Park Avenue was to be measured by what it would 
 have to pay to acquire private property for an 
 entrance. 
 
 This theory is quite as speculative as the as- 
 sumption would be that if the road were by legis- 
 lative fiat shifted to Fifth Avenue upon an ele- 
 vated structure, the resulting damages to abutters 
 would measure the value of its present right to 
 l)e where it is. 
 
 The fact was further pointed out to the Referee 
 that the assessed value of lands abutting on Park 
 Avenue varied directly according to the extent to 
 which the railroad was out of sight by reason of 
 very expensive structures erected by the railroad 
 company, and to a large extent paid for by it, con- 
 serving to a very large degree, and as to the 
 tunnel portion in iota, the street uses of Park 
 Avenue. 
 
 In other words, the argument is that the more 
 the railroad expends in keeping its railroad out 
 of the way, the more highly tliat right should be 
 valued as measured by the assessed value of abut- 
 ting lots. The unfairness of this argument needs 
 
29 
 
 only to be stated to be realized. It is almost imi- 
 versally the accepted doctrine, certainly by the 
 courts, that longitudinal occupation of streets 
 by railroads, or other public utilities, is to be 
 measured in value by the return which the rail- 
 road realizes from such occupation. If upon the 
 hypothesis of the learned counsel for the defend- 
 ants the railroad company was required to vacate 
 Park Avenue entirely, assuming that this could 
 lawfully be done, it would be a vein' serious ques- 
 tion whether it could continue to have its terminal 
 at 42nd Street. 
 
 AVe submit that the ruling of the Referee was 
 entirely right, and that the evidence was wholly 
 without bearing upon any issue in the case. 
 
 THIRD POINT. 
 
 The Referee, and the Conrts below were 
 clearly right in holding that the southerly 
 half of the Harlem Bridge was erroneously 
 included in the assessment. The method 
 adopted, however, of correcting the error 
 was erroneous. 
 
 The southerly half of the Harlem bridge is in- 
 cluded in the assessment for the railroad in Park 
 Avenue between 45th and a point near 13.'lrd 
 Street, and the assessment was not separately 
 stated (See notice of the Ta.\ Coitimissioners 
 printed at page fifi, fol. 198 of the record). It is 
 wholly a matter of conjecture as to how large this 
 item bulks in tbe total of $1 2,29t>,I^l^h which also 
 includes lengthwise in Park Avenue, and cross- 
 
30 
 
 ings East 45th to East 49tli Street east of Park 
 Avenue, and East 45Lh to East 48tli Street west 
 of Park Avenue. It is, we think, to he assumed 
 that in maldng this total of $12,299,400 the Tax 
 Board had set various amounts opposite these 
 separately stated items, and that some substantial 
 sum was set opposite the item for one-half of the 
 Harlem bridge. It is to he further assumed that 
 this substantial amount set opposite the Harlem 
 bridge, whatever it was, was composed of two 
 elements: (1) the value of the tangible property, 
 and (2) the value of the intangible right. The 
 learned Referee, and Special Term, have sus- 
 tained the Relator’s objection to the inclusion of 
 this item, whatever it is, in the total assessment. 
 The validity of their ruling in this respect has 
 been recently confirmed by the decision of the 
 Court of Appeals in People ex rel. Hudson d 
 Manhattan Railway Company vs. State Board of 
 Tax Commissioners, 203 N. Y., 119. In that case 
 the question was presented of the jurisdiction 
 of the defendant Tax Commisisoners to assess 
 as a special franchise the right enjoyed by the 
 Relator of operating two tunnels under the North 
 River, which right — lie it title to land or to ease- 
 ment in land — was granted many years ago by the 
 Land Board acting as the agent of the State of 
 New York. The Court held that while a navigable 
 stream was in a sense a highway, it was not the 
 kind of highway which was intended in the tax 
 law, and accordingly directed that the assess- 
 ment levied on these tunnels he strickeTi from the 
 assessment which also included other property 
 under streets in the City of New York, which 
 the Court considered to be property assessable 
 as special franchises. x\lthough this decision of 
 the Court of Apy)eals seems to set the general 
 
proposition at rest, we deem it proper in this 
 connection to call attention to the fact that on 
 the trial relator introdnced in evidence deeds 
 showing the approach to the Harlem bridge at 
 both ends was over property privately owned by 
 the relator, or its lessor, the Xew York and Har- 
 lem Eailroad Company; viz., deed from Charles 
 Henry Hall and wife, to the N. Y. & H. R. R. Co., 
 dated June 19, 1847 (p. 103, fob 309) ; deed from 
 Benjamin L. Benson and wife, dated June 19, 
 1847 (p. 104, fob 312) ; deed from Benjamin L. 
 Benson and wife, dated June 19, 1847 (p. 105, fob 
 314) ; deed from Charles Henry Hall and wife, 
 dated December 30, 1840 (p. 106, fob 316) ; deed 
 from Isaac Adriance and wife, dated May 25. 
 1846 (p. 107, fob 320) ; deed from the New York 
 & Harlem R. R. Co. to the New York Central 
 and Hudson River R. R. Co., dated April 1, 1873 
 (p. 108, fob 323) ; deed from Lewis Morris to 
 the N. Y. & H. R. R. Co., dated October 23, 1852 
 (p. 110, fob 328); deed from Jordan L. Mott to 
 the N. Y. & H. R. R. Co., dated Septeml)er 22, 
 1852 (p. 110, fob 330). 
 
 The descriptions in these various deeds are in- 
 serted in full in the record. A map was also in- 
 troduced, Exhilht K”® (Appendix, p. 830), which 
 shows the location of the property conveyed by 
 these various deeds plotted on the map with ref- 
 erence to the situation of the railroad and the 
 bridge spanning the Harlem River. It will 1)(‘ 
 seen that parcels of private property acquired bv 
 the railroad company intervene between the rail- 
 road in Park Avenue and the southwesterly bulk- 
 head line of the Harlem River. The extent to 
 v/hich private profterty owTied by the railroad 
 intery)oses ])etween the alleged special franchise 
 in Park Av'^enue and the southwesterly bulkhead 
 
line of the Harlem River is wholly immaterial, 
 hhie Harlem Bridge is not used in physical con- 
 nection with any railroad in Park Avenue, but 
 with a railroad on each side of the Harlem River 
 constructed upon private property. 
 
 Further than that the Relator proceeded to 
 ]U’ove that neither the City nor the State of New 
 York had any right, title or interest in the Harlem 
 River or the land under it, across which this 
 bridge extends. 
 
 See Chapter 147, Laws of 1876, entitled “An 
 Act granting to the United States the right to 
 acquire the right of way necessary for the Im- 
 provement of the Harlem River and Spuyten 
 Duyvil Creek from the North River to the East 
 River through the Harlem Kills, and ceding juris- 
 diction over the same”; passed April 22, 1876. 
 and the various session laws amending the said 
 act, viz.. Chapter 345, Laws of 1879; Chapter 65, 
 Laws of 1880 ; Chapter 61, Laws of 1881 ; Chapter 
 377, Laws of 1882; Chapter 214, Laws of 1883 (p. 
 280, fob 840). 
 
 Also resolutions of the Commissioners of the 
 Sinking Fund, one dated October 2, 1879, and the 
 other dated September 7, 1881, with reference to 
 said improvements, and the cession of land under 
 the Harlem River to the United States (p. 281, 
 fols. 841-855). 
 
 Relator then offered in evidence a deed exe- 
 cuted by the Mayor, Aldermen and Commonalty 
 of the City of New York, dated March 31, 1882, 
 granting to the United States of America certabi 
 pieces or parcels of land under the waters of the 
 Harlem River therein specifically descrilied for 
 the purpose of the improvement known as tbe 
 Harlem Ship Canal, this grant having been made 
 under authority of the statutes hereinbefore re- 
 
ferred to. Tliis deed is also printed in the Ap- 
 pendix, p. 958, fol. 2872. 
 
 In view, not only of the decision of the Court 
 of Appeals referred to, but of these documents 
 received in evidence, it is difficult to see what 
 there is left in the way of a franchise from the 
 State or City of New York, which is subject to 
 taxation. We do not contend, of course, that the 
 bridge itself is wholly exempt from taxation. It 
 is an erection on private property owned by the 
 Eelator, or the New Y"ork and Harlem Railroad 
 Company, its lessor, and extends laterally from 
 lands which are located within the City of New 
 York and are properly subject to the local taxing 
 authorities. As a matter of fact the local taxing 
 authorities have always assessed this property 
 as real estate, and the relator has paid taxes 
 thereon during all the years that the franchise 
 Tax Law has been in existence, including the year 
 1908. 
 
 This brings us to the other branch of the propo 
 sition, viz., the method adopted by the Referee 
 and the Court below to cure this error. It was 
 testified to by Mr. Hoyt (p. 127, fol. 381) and 
 found by the Referee and the Court that the value 
 of the tangible property comprising the southerly 
 half of this bridge, was the sum of $312,401. What 
 appraisal of the intangible right, which, adfled to 
 this value of the tangible, would equal the smii 
 which the Tax Commissioners included without 
 stating the amount thereof in their total assess- 
 ment, it was impossible, of course, to determine. 
 As we have already shown, the original return 
 of the defendant Tax Commissioners contains no 
 infonnation on tho subject; the Relator’s 
 subj'Kcnas on their motion were (plashed, so that 
 they could not be compelled to apjiear ladore the 
 
34 
 
 Referee and testify to this information, and finally 
 their amended return contains no information 
 whatever on the subject. The case seems to be 
 absolutely on all fours with the Harlem River 
 and Port Chester Railroad Company’s case de- 
 cided by Senator Elsberg, Referee (N. Y, Law 
 Journal, April 24, 1909), where without separa- 
 tion the Commissioners had taxed two highway 
 crossings, one of which was a special franchise, 
 and the other of which was not. The Referee held, 
 and he was confirmed by the Court, Mr. Justice 
 Betts sitting, that the whole assessment was void 
 and must be stricken from the rolls, and from this 
 determination no appeal was taken. See also 
 
 Potter vs. The Mayor, 151 N. Y., 16, 19 ; 
 
 People ey rel. Garden City Co. vs. Valen- 
 tine, 5 App. Div., 520; 
 
 cases cited and relied upon by Senator Elsberg. 
 
 In the case at bar the Referee assumed to cure 
 this conceded illegality by merely deducting from 
 the total assessment the value of the physical 
 property in the southerly half of the bridge, as 
 testified to by Mr. Hojd and as found by himself, 
 viz., $312,461. That, of course, still left in the 
 assessment the value of the intangible element, 
 which, of course, is non-existent, and upon which 
 the Relator is nevertheless required to pay taxes. 
 We submit that this was manifest error on the 
 part of the learned Referee, and the Trial Court. 
 The true and only remedy under the circum- 
 stances is to declare the entire assessment void, 
 and direct its cancellation on the rolls. 
 
 If it should be suggested that the Relator should 
 make consecutive and persistent motions for an 
 amended return on the part of the Tax Commis- 
 sioners, so that they would finally disclose the in- 
 
formation that ought really to have been includeil 
 in the original notice of assessment, we are met 
 by a decision of the Supreme Court, Special Term, 
 Mr. Justice Rudd sitting in People ex rel, M. 1'., 
 0. (P ir. It. Co. vs. Woodbury, reported 71 Misc., 
 474, atf’d without opinion 147 App. Div. 929 and 
 by this Court, without opinion, to the effect that 
 because the Tax Commissioners rendered a re- 
 turn which contained no actual information and 
 which the Court could not understand was no 
 reason why the Relator should compel them to 
 file one that does convey such information and 
 is intelligible. If our conception of the effect 
 of this decision is correct, the defendant Tax Com- 
 missioners have fortified themselves at every 
 point so as to deprive the court and the com- 
 plaining party of any information whatever in 
 reference to these assessments, and the method 
 of making them. If, as the result of this extra- 
 ordinary situation, the courts are prevented from 
 getting the necessary information to enable them 
 to make a correction, the defendants surely can- 
 not complain if the entire assessment is stricken 
 out as void, which we submit should he done 
 here. This is simply an additional reason for 
 the insistence made in our First Point that if 
 any portion of the railroad in Park Avenue is 
 held to be not a special franchise, the whole assess- 
 ment, because inse])arahle, must fall, 
 
3G 
 
 FOURTH POINT. 
 
 The State Board of Tax Commissioners 
 was without jurisdiction to include as spe- 
 cial franchises the title to the sub-surface 
 of certain Streets near the Grand Central 
 Terminal which Relator obtained from the 
 City of New York pursuant to special legis- 
 lation on the subject. 
 
 Kelator offered in evidence Chapter 425 of the 
 Laws of 1903, and the grant and agreement dated 
 June 19, 1903, between the City of New York and 
 the New York and Harlem Railroad Company, 
 Lessee of The New York Central and Hudson 
 River Railroad Company; also grant and agree- 
 ment dated December 4, 1903, between the same 
 parties, and the grant and agreement dated April 
 28th, 1905, between the same parties under said 
 Chapter 425 of the Laws of 1903 as amended by 
 Chapter 639 of the Laws of 1904, and also said 
 Chapter 639 of the Laws of 1904; the relator also 
 offered in evidence agreement dated July 8, 1907, 
 between the same parties as authorized by the 
 session law cited, l)eing a modification of detailed 
 ])lans (p. 831, fob 2491 to p. 919, fob 2755). 
 
 Relator also offered in evidence, while Mr. IV. 
 H. Hoyt was on the witness stand, a map of the 
 Grand Central Terminal, exhibiting the premises 
 granted by the City under the agreements and 
 grants in evidence and already offered, and the 
 extent to which the terminal work had progressed, 
 and there had been erections made by the railroad 
 compan}" within the street lines, and below the 
 surface thereof, as of the second Monday of Jan- 
 uary, 1908 (p. 121, fob 359, reproduced in the 
 
Appendix, p. 932). Exhibit S-190S, shows tlie 
 general layout as it existed prior to the improve- 
 ments carried out under the act of 1903, and sub- 
 sequent acts (Appendix, p. 931). Exhibit T-190S 
 shows a plan of the street level of the new Grand 
 Central Terminal, the various grants made by 
 the City of lands under the surface of Park Ave- 
 nue and the cross streets being indicated by col- 
 oring, and the extent to which lands under these 
 Cl OSS streets had been excavated and permanent 
 erections made were also indicated as shown in 
 the legend on the map, together with the annual 
 payments reserved to the City for the grants of 
 lands under the surface of the streets. 
 
 Mr. Hoyt’s map shows that no part of the ex- 
 cavation had extended westerly of the west line 
 of Park Avenue, including \’'anderl)ilt Avenue, 
 and that no erection of new structures had ])cen 
 made under the surface of Depew Place. The 
 black lines on the map indicate the extent to 
 which erections had been made in the cross streets 
 from 45th Street to 50th Street, and under the 
 easterly portion of Park Avenue from 50th Street 
 to 57th Street. 
 
 As the relator obtained no use from these part- 
 ly erected structures, it is manifest that the in- 
 tangible element in these sub-surface rights was 
 of merely nominal value. 
 
 The grant from the City, datofl June 19, 1903, 
 may be taken as an index of the language con- 
 tained in all the grants. The granting clause is: 
 
 “The party of the first part (the City of 
 New York) for and in consideration of the 
 sum of Twenty-five thousand ($25,000) dol- 
 lars per annum, to be paid to the party of the 
 first part, as hereinafter f)rovidefl, and in 
 order to enable the said parties of the second 
 part to depress their tracks in the manner 
 
38 
 
 provided in said act, and in order to permit 
 the operation of trains otherwise than by 
 steam locomotives, as required by said act, 
 does hereby grant to the said parties of the 
 second part the right to occupy and use for 
 the purposes of their incorporation, and dur- 
 ing the term or terms of their corporate exist- 
 ence. 
 
 The sub-surface of Park Avenue from 
 Forty-fifth Street to the southerly line of 
 Fifty-sixth Street; the sub-surface of Park 
 
 Avenue, bounded and described as follows ’ ’ : 
 
 * * * 
 
 “Nothing in this grant contained shall be 
 held to create a fee in the said parties of the 
 second part, or either of them, in or to the 
 soil of said portions of said streets or of Park 
 Avenue, or any part thereof ; nor to prevent 
 The City of New York from occupying or 
 using, or from permitting others to occupy 
 or use any part of the said soil of said por- 
 tions of said streets or avenue underneath 
 the tracks and structures of said parties of 
 the second part, as shown on the plans and 
 profiles provided for in section three of said 
 Act, in any manner which shall not interfere 
 with or endanger the occupation or use by 
 said parties of the second part; which plans 
 and profiles were submitted by The New 
 York Central and Hudson River Railroad 
 Company, in duplicate, to the said Board of 
 Estimate and Apportionment for its approval 
 on the 29th day of May, 1903, and were ap- 
 proved by said Board of Estimate and Ap- 
 portionment on the day of the date hereof.” 
 
 It will be observed that the agreement in ques- 
 tion amounts to a grant in perpetuo for an annual 
 payment of the right to use the lands under the 
 streets mentioned in any way, and for any pur- 
 
pose which the grantees see fit, provided it be for 
 the purpose of their incorporation.. The upper 
 limitation is the surface of the streets as deter- 
 mined by the plans approved by the Board of 
 Estimate and Apportionment, and the lower limit 
 is as shown on such plans. The City retains the 
 right to the soil below the structures indicated in 
 said plans, and can authorize any other railroad, 
 or other structures, or use, to occupy the same 
 provided it does not interfere with the rights 
 granted. 
 
 This is not a permission to lay tracks, or pipes, 
 or conduits, upon, over or under the surface of 
 public streets, the situation which gave rise to 
 the enactment of the Ford Franchise Tax Law, 
 and the situation as contemplated in the act itself. 
 Doubtless the property of the relator thus con- 
 veyed, together with whatever jjhysical erections 
 are made within the space conveyed, are taxable 
 as real estate, l)ut l>y the local taxing authorities. 
 It would be just as appropriate to tax as a special 
 franchise lands under watet- owned by the City 
 and granted by the City to a private person for 
 dock or manufacturing j)urposes. The City has 
 exacted very substantial compensation for the 
 grants made to the railroad company for space 
 which may he valuable to the railroad company, 
 but which is actually worthless to the City. 
 
 Fanyiinf! vs. Oshoryu' (102 N. Y., 441), cited by 
 the Referee (p. 719, fob 21 oG) holds that a private* 
 party for private pnrf)Oses cannot ofeerate a rail 
 road on the surface of a public street. 1’his is 
 far from hobling that the perijctual lease of por- 
 tions of the space under the surface of public 
 streets for terminal railroad })ur])f)scs is the grant 
 of a special franchise witliin the meaning of the 
 tax law. 
 
40 
 
 Mr. Hoyt testified to the various erections which 
 had been made under the surface of these cross 
 streets and under Park Avenue. The total value 
 of all of the structures in question as of the sec- 
 ond Monday of January, 1908, was the sum of 
 $234,676 (p. 126, fol. 377). As already stated, the 
 Board of Tax Commissioners did not make any 
 separate valuation of these various alleged fran- 
 chises. They are all lumped together in one in- 
 separable amount. The situation is without pre- 
 cedent, and we can only argue on the general 
 principle that the franchise Tax Law does not 
 include or contemplate such a situation as is d''- 
 closed with reference to the lower end of Park 
 Avenue and these various cross streets. 
 
 FIFTH POINT. 
 
 The Referee, and the Courts below, cor- 
 rectly ruled that Relator is entitled to 
 have the assessment equalized with the 
 assessments of other real estate not special 
 franchises in New York County. 
 
 The tax law in force at the time this assessment 
 was made required the State Board to assess at 
 full value, and the presumption is that they 
 obeyed the law. 
 
 The right of such equalization, after much dis- 
 cussion and some contrariety of judicial opinion, 
 has been finally settled by the Court of Appeals 
 in People ex rel. Jamaica Water Supply Compau}! 
 vs. State Board of Tax Commissioners (196 N. Y., 
 39). See discussion l)y Willard Bartlett, J., 
 pages 60-62. This rule has been followed in nu- 
 
41 
 
 merous other cases which have come before the 
 courts. This course of adjustiug assessments has 
 become so universal that m 1911 the Legislature 
 amended the Tax Law, Chapter 8U4, of the Laws 
 of 1911, by giving the State Board of Tax Com- 
 missioners authority, after fixing an assessment 
 at full value, to equalize it so that the same will 
 be upon a par with assessments of other real es- 
 tate not special franchises in the same taxing dis- 
 trict. 
 
 In the case at bar the found fact (p. 557, fob 
 1670) is that the percentage of realty assessment 
 in the County of New York to full value, other 
 than special franchise corporations, for the year 
 1908, was 89. 
 
 The City of New York, intervening-defendant, 
 has appealed from that part of the final order 
 which eciualizes the assessment in question, its 
 contention being, as we understand it, that on its 
 presentation of the net earnings of this alleged 
 special franchise the intangible element and tin- 
 assessed value of the tangible property together 
 greatly exceed the assessment of $1 2,299, 400.n!) 
 made by the State Board of Tax Commissioners 
 as the full value of the franchise (p. 66, fol. 198). 
 As we have shown, this claim rests upon assuni})- 
 tion of facts and hypotheses utterly witliout war- 
 rant in the evidence, and in fact, contrary to com- 
 mon sense and common observation. 
 
 Tlie R(‘feree, and the 'Frial Court, sjK-eificallv 
 refused to find the findings of fact covering tlii-^ 
 presentation j)roposed by tin- intervening-defend- 
 ant (pp. 705-710, fols. 2115-21.30). Tln-re are no 
 findings in the case that the assessed value of tin- 
 relator’s projjcrty was h-ss tban its true value, 
 even wlien reduced so as to (-(inalize it witli tl-e 
 prevailing rate of assessment. 4’lie (Vnirt below, 
 without holding that the assessment under r* 
 
view was either below or above the true value of 
 the alleged special franchise, in effect sustained 
 it because in its opinion no facts had been ad- 
 duced on the hearing on which a re-assessment 
 could be predicated. 
 
 This situation makes the application of the re- 
 cent ruling of the Court of Appeals in People ex 
 rel. The Hudson S Manhattan Railway Company 
 vs. State Board of Tax Commissioners, 203 N. Y. 
 119, exactly applicable to the case at bar. Chief 
 Judge Cullen says in discussing an appeal by the 
 City exactly similar (p. 132) : 
 
 “In the absence of such a finding it must 
 be assumed that the State Board assessed 
 the relator’s property at its full value — a 
 presumption which the evidence in this case 
 fully supports, and the relator was entitled 
 to the reduction.” 
 
 It would seem that further discussion of this 
 point is superfluous. 
 
 The order appealed from should he re- 
 versed, and the assessment cancelled, or in 
 the event that the cotirt finds that any 
 part of the assessment is legal and separa- 
 ble from the illegal portion, the order ap- 
 pealed from should be reversed and the 
 case remitted to the special term for fur- 
 ther proceedings. 
 
 Respectfully sulanitted, 
 
 Alex. S. Lyman, 
 Attorney and of Counsel 
 for the Relator. 
 
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