The relator is a corporation of the state of New Jersey, operating certain steamship lines between the port of New York and European ports. It is the tenant and occupant, under three leases made in 1894 by the city of New York, of two piers in the waters of the North river and of bulkheads between the same, or adjoining thereto. The leases, under which the relator acquired the right to occupy and to use this property, contain among their provisions one which obligated the lessee "to erect, construct and maintain upon the said pier as widened, during the term of these presents, a shed." The provision requires the shed to be erected in accordance with the laws and regulations in such *Page 100 cases and in conformity with plans and specifications approved by the dock department, and continues thus: "Said shed to become the property of the parties of the first part on the expiration or sooner determination of this lease or any renewal thereof, free of all claims, charges and incumbrances of every kind whatsoever, etc." The relator shedded the leased property, as required by its lease, and, in 1896, the buildings were assessed as its property for taxation. According to the return made by the commissioners of taxes and assessments of the city of New York to the writ of certiorari, which issued upon the petition of the relator, the structures assessed against the relator were "substantial sheds and buildings" and were "firmly affixed to the land."
The question is whether these structures, or sheds, as they are described in these leases, could be legally assessed for taxation purposes as the property of the relator. The learned corporation counsel admits, if the sheds belonged to the city of New York, that they were exempt from taxation; while the counsel for the relator admits, if they were the property of the relator, that they had been properly assessed. Under the statute in force, all lands within this state, owned by individuals or by corporations, shall be liable to taxation; and the term "land" is to be construed to include the land itself and all buildings and structures erected upon or affixed to the same. (1 R.S. ch. 13, tit. 1. secs. 1 and 2.) These sheds must be deemed, therefore, to partake of the nature of realty and the question of their ownership must turn upon the terms of the leases. The appellants rest their argument, with respect to the question of ownership, upon the provision of the lease above mentioned, that the shed shall become the property of the city after the expiration of the lease; which provision, as they maintain, shows that it was in contemplation of both parties that the erections should be the property of the steamship company during the term of the lease.
We think that this is an incorrect view of the situation. It is a familiar rule, that, when structures are erected by persons not owners of the land, they become part of the realty, *Page 101 and, as such, the property of the landowner. It requires an agreement to be expressed in order to prevent the operation of this rule. If the right of removal is reserved to the lessee in a lease, then, in such a case, he will be regarded as an owner of real estate for the purpose of taxation. (People ex rel. VanNest v. Commissioners of Taxes, 80 N.Y. 573.) When the lease in question provides that the sheds are to become the property of the city at its expiration, the language does not warrant the inference of an intermediate ownership; unless we attach an undue significance to the word "become." Such a meaning we do not think should be attached to that word; whether we regard the purpose that it apparently subserves; or whether we regard the confusion of ideas which would follow, if it had the meaning claimed for it. Its use was, evidently, to prevent any misunderstanding as to a right of removal, whether under a general claim of property in the erections, or under a claim to them as trade fixtures. It was to make the city's ownership definite. The provision followed naturally, and not without some degree of pertinence, upon the obligation imposed upon the lessee to erect a shed. Its presence had the effect of negativing any inference from the requirement that the lessor had waived its ownership. The obligation resting upon the lessee to erect a shed was one of the conditions of the letting by the city and formed a part of its consideration. As the learned counsel for the respondent justly observed, it is not legally conceivable that the relator could be an owner until the termination of the lease and that then a new ownership should spring up in the city; for "ownership necessarily implies perpetuity, or at least the possibility of perpetuity."
The general rule, where the lease is silent upon the subject, imposes upon the lessor the obligation to pay the taxes upon the leased property and, in this case, it would be a seeming incongruity, if the city, which is the taxing power, could assess its tenant for taxation. The obligation to erect the structures, as one of the conditions of the letting, and the denial of the right of removal are considerations, which irresistibly militate *Page 102 against the assertion of a right to assess them as property of the relator for taxation.
The order appealed from should be affirmed, with costs.