N. Y. Rep.] Opinion of the Court, per WILLARD BARTLETT, J.

George Zabriskie and Joseph P. Cotton, Jr., for New York Mutual Gas Light Company, intervening. Frank II. Platt and Henry W. Clark for Consolidated Gas Company of New York, intervening. It was the intention of the legislature which passed the Special Franchise Tax Law that special franchises should bear an equal burden with other real estate, and no greater. There is nothing in that law which would tend to the conclusion that it was intended that the holder of a special franchise should be deprived of his fundamental right of equalization which the Tax Law provides, and there is no reason to suppose that section 250 of the Tax Law (as to proceedings to correct inequality) does not apply to special franchise assessments as well as all other real estate. (People ex rel. M. S. R. Co. v. State Board, 174 N. Y. 417; People ex rel. B. R. Co. v. Tax Comrs., 41 Misc. Rep. 548; People ex rel. R. T. Co. v. Tax Comrs., 101 App. Div. 223; Taylor v. L. & W. R. R. Co., 88 Fed. Rep. 350.)

Charles A. Collin, John L. Wells and George D. Yeomans for Brooklyn Rapid Transit Company, intervening. The relator was entitled to have its assessment reduced so that it should be on an equality with the assessments of other real estate on the same tax rolls. (L. 1896, ch. 908, $$ 45, 250, 253; People ex rel. M. S. Ry. Co. v. Tax Comrs., 174 N. Y. 417.)

WILLARD BARTLETT, J. In the determination of this appeal it is essential at the outset to ascertain precisely what questions are presented for our consideration. These depend upon the scope and extent of the powers conferred upon the Supreme Court by the legislature in so-called certiorari proceedings to review the action of the state board of tax com missioners in valuing a special franchise for purposes of taxation. That power is wholly statutory that is to say, it is derived from the provision of the Tax Law. Ordinarily, the writ of certiorari whereby the court reviews the judicial or quasi-judicial determination of a board or body of officers

Opinion of the Court, per WILLARD BARTLETT, J.

[Vol. 196. brings up for consideration only the evidence on which such board or body of officers acted and the court is called upon to decide whether any error of law or fact was committed in dealing with such evidence. When the action of assessing officers, however, is questioned by a writ of certiorari under the Tax Law, the court is authorized by the statute to take further and additional proof as to the true value of the assessed property, and upon such proof, in addition to the evidence before the assessing officers, it must endeavor to reach a correct conclusion as to what is a proper valuation. A certiorari proceeding under the Tax Law, therefore, is very much like a revaluation of the property which is the subject of

assessment.

Although the Tax Law provides that the testimony in these cases must be taken by a referee, who is to report the same with his conclusions of law and fact, it is to be noted that the final determination of the question whether the valuation by the assessing officers was erroneous or not, rests not with the referee but with the court at Special Term, to which he reports the testimony and his conclusions, which in the language of the statute constitute only "a part" of the matter upon which the court is to base its determination. When such a case comes before the Appellate Division, therefore, it is not merely the report of the referee with the annexed proofs, which that tribunal has to review, but it is also the decision of the court at Special Term with all matters upon which such decision is founded that is to say, the Appellate Division must consider the return of the assessing officers, including all proofs and exhibits accompanying the same, as well as the testimony reported by the referee and his conclusions. Upon this aggregate of papers, the Appellate Division is called upon to determine whether the court at Special Term has properly upheld or overruled the valuation adopted by the assessing officers.

In a case of this kind, the purpose sought to be attained through the state board of tax commissioners in the first instance and subsequently by means of certiorari proceedings

N. Y. Rep.] Opinion of the Court, per WILLARD BARTLETT, J.

at a Special Term of the Supreme Court, is a correct valuation of the particular special franchise in question. The legislature has not seen fit to prescribe any rule by which the value of special franchises is to be ascertained. It has declared that certain tangible property is to be treated as constituting part of a special franchise, but this is very far from laying down any exclusive principle of valuation. That it would be extremely convenient for the state board of tax commissioners to be able to refer to a legislative rule for their guidance is evident; and that those corporations which enjoy special franchises are equally anxious that a definite rule of assessment should be established is evident from the briefs submitted in behalf of the parties who have been permitted to intervene on the present appeal. Many of them are frankly desirous that the courts should do what the legislature has not done, that is, enunciate some hard and fast rule by which the state board of tax commissioners must be controlled in valuing special franchises for the purposes of taxation. The Appellate Division in the third department, so far as the present case is concerned, has complied with their wish and has directed the adoption of what is known as the net earnings rule, with certain specified modifications and

limitations.

In our opinion it is beyond the province of the courts to lay down an exclusive rule of franchise valuation applicable to all cases. Of course, if there were only one reasonable method of getting at the true value of a special franchise, it would plainly be the duty of the state board to adopt that method. It is conceded, however, that there are many reasonable methods, and it is not for the courts to insist that one shall be pursued rather than another so long as the legis lature has chosen to leave them all equally open to the assessing officers. When a particular assessment comes up for review, as in the present case, the duty of the appellate courts is discharged when they inquire whether the rule whereby the value of this special franchise was ascertained was reasonably adapted to that end, and, if so, whether it

Opinion of the Court, per WILlard BartletT, J. [Vol. 196.

was consistently and correctly applied to the facts; in that event, the decision of the Special Term must be approved, even though we may think that some other rule might well have been preferred.

I cannot express my own views on this subject better than by quoting from one of the opinions of ROBERT EARL, formerly chief judge of this court, written by him as referee in the celebrated litigation involving the constitutionality of the amendment to the Tax Law by which this very tax on special franchises was first imposed. He said: "There is no law or authority which requires assessors, in making assessments, to adopt any certain or fixed rule or method. The only rule for their guidance is the actual value of property to be assessed, and they may avail themselves of all tests of such value within their reach, and of every fact, and all information which in their judgment has any bearing upon such value. If, in assessing these franchises, these officers included with them the value of any other property, thus enhancing their value, their assessments would be illegal. This I do not understand they did. I cannot find that they assessed any values but the special franchises; but in assessing them they considered several incidental matters, such as earning capacity, business advantages, etc., all bearing upon their value. If the local assessors throughout the state are bound to adopt some certain rule or method in reaching assessable values, and if their assessments must fail unless when questioned they can state some certain rule or method by which they were guided, I believe a large share of their assessments would fail to withstand the assaults of the taxpayers. All that such assessors could say when questioned is substantially what these officers have said here, that they have availed themselves of such information as they could obtain as to values and then fixed them according to their best judgment. Assessments when thus made are not illegal. They may be too high, and for that the remedy is by review. It is only when undisputed facts are before the assessors, and by adopt ing some wrong rule or method they disregarded such facts

N. Y. Rep.] Opinion of the Court, per WILLARD Bartlett, J.

and thus enhanced their assessments, or when, by adopting a wrong rule or method, they included in their assessments some element of value not belonging there, that the courts have condemned assessments for the use of an improper rule or method."

In the consideration of this case we are bound to assume at the outset that the valuation of the relator's special franchise as fixed by the state board of tax commissioners was correct. "It is essential that a party assailing the validity of an assessment should make it conclusively appear that the method by which the assessors arrived at the result complained of was incorrect, and that the assessment does not represent the fair value of the property assessed." (People ex rel. Westchester Fire Ins. Co. v. Davenport, 91 N. Y. 574, 581. See, also, People ex rel. Osgood v. Commissioners of Taxes, 99 N. Y. 154; People ex rel. Panama R. R. Co. v. Commissioners of Taxes, 104 N. Y. 240, and People ex rel. Burke v. Wells, 184 N. Y. 275.) In the case last cited Chief Judge CULLEN said that "the presumption is that the determination of the assessors was correct, and to relieve itself from assessment it was incumbent upon the relator to clearly show that the assessment was erroneous." (p. 279.)

The return to the writ of certiorari did not disclose the method whereby the state board of tax commissioners arrived at the sum of $800,000 as a just and true valuation of the special franchise of the relator. It left the Special Term in the dark on that subject. The return, it is true, did state that the board had considered the value of the relator's real estate in the streets and the value of its right to use the streets and the cost of its property and the income derived therefrom as elements in arriving at the valuation of the special franchise. The return also contained certain negative averments, such as the statement that no property was included in the valuation except such as was in, under, above or running through the streets; nor was the value of the right to be a corporation included; nor the value of the good will of the business carried on by the relator. Nevertheless, when the