People ex rel. New York & New Jersey Telephone Co. v. Neff

Bradley, J.:

This proceeding was instituted by certiorari to review the assessment of the personal property of the relator, and was heard upon the petition, writ and return at Special Term, as provided by statute. (Laws of 1896, chap. 908, art. 11.) The original assessment for the *10year 1896, as entered on the books of annual record of assessed valuations, was $641,420. The relator applied in June for its correction and reduction. No hearing was had upon such application until July twentieth, when the treasurer of the relator was examined, and afterwards, on July twenty-ninth, the assessment was increased to $1,019,827. The decision of the trial court was to the effect that, as to the amount of the increase so made, the assessment was illegal, and that the original assessment was erroneous, and that it be reduced to $424,164.32.

The illegality of that increased amount is dependent upon the want of power of the board of assessors to add it to the assessment as originally made. The charter of the city of Brooklyn provides that the assessors shall make and complete their assessed valuations of taxable property by the first day of June and enter them in books called Annual Record of Assessed Valuations ; that the books shall be kept open for examination and correction until the first day of July, when they shall be closed. During the time said books shall be open, said assessors shall give due notice thereof as required by law, and during that time application may be made by any person aggrieved by the assessed valuation of his or her real or personal estate to have the same corrected.” (Laws of 1888, chap. 583, tit. 10, § 8.) After the completion of the assessment on June first and notice given, the assessors had no power to make a change in any of them without the application of some person to have the assessment made of his property corrected. (The People ex rel. Chainberlain v. Forrest, 96 N. Y. 544.) As has been observed, such application may be made by a person aggrieved. It is by virtue of that provision of the statute that application was made by the relator. Thereupon it was the duty of the “ assessors to attend durifig such examination and review and to make corrections.” (Laws of 1888, chap. 583, tit. 10, § 9.)

It is insisted on the part of the defendants that, when the opportunity for review and correction of the assessment of the relator’s property was given by its application, it was within their power to increase the amount of it. Whatever may be the literal import of the word “ corrected” or “ correction,” it seems quite evident that it was not within the purpose of its use in the statute to enable the assessors to increase the assessment on such review. The applica*11tion is made by the person aggrieved.” It is his grievance, not. that of the municipality represented by the assessors, upon which review and correction are sought and made. Anything beyond that is not deemed within the contemplation of the statute. There is no-substantial difference in the construction and effect in that respect of the statute before referred to and the general statute as it existed prior to 1851, which provided for review of “ assessments on the application of any person conceiving himself aggrieved.” (1 R. S. 393, § 20.)

Our attention is called to no case in which permission has been recognized to increase an assessment on such review under either statute. Both of them provided for review solely upon the complaint of the person aggrieved or conceiving himself so to be by the assessment. The statute makes the remedy his, and it is by him alone that relief is sought. It, therefore, seems that the application provided for has an apparent purpose consistent only with the review of the alleged grievance of the applicant. It may also be observed that, if the effect of an increase of an assessment on such a review should be to include additional property within it, the notice given under the statute would not be sufficient to render the inclusion of other property in the assessment legally effectual against the person entitled to notice and opportunity to be heard. (Stuart v. Palmer, 74 N. Y. 183; Overing v. Foote, 65 id. 263 ; Clark v. Norton, 49 id. 243.) In the present case, it cannot be assumed that other property was added to make the increase, although it does not appear just how it was obtained.

It is urged by the counsel for the relator that not only the increased amount, but the entire assessment was illegal, because the increase-was made after the first day of July, and that the original assessment was vitiated for the want of proceedings to validate it, following the application for correction.

It may be that a literal interpretation of the statute indicates that the corrections are to be made by the board during the time the books are to be kept open for examination and correction, which is until the first day of July, when the statute directs that they shall be closed. Those provisions are entitled, to a reasonable and practicable construction in view of their purpose. The statute contemplates that any application for correction shall have consideration, *12and if it relate to personal property that the applicant shall be examined upon oath, and that applications may be made at any time within which the books remain open. (§ 8.) The applications may be numerous, and many may be made on the last day of June. The purpose of the statute cannot be accomplished if the power to consider applications is limited to the time expiring with June. The reasonable intendment of those provisions of the statute is that the books are closed to applications for correction on the first day of July, and that the examination and review, founded upon applicar tions before then made and undisposed of, may follow that time.

While it is true that the original assessment of $641,420 was hok, as such, represented by a completed roll open to inspection for fifteen days, as provided by statute (Laws of 1896, chap. 908, § 38, which took the place of Laws of 1880, chap. 269, § 9, repealed), yet it may be assumed that a completed assessment roll for the larger amount was duly subject to inspection. This contained the original with a further amount added. The invalidity of the latter did not infect such original assessment with illegality. And assuming, as we have thus far, that the additional sum in the roll was illegal, it could be stricken out as such. (Laws of 1896, chap. 908, § 253; People ex rel. Garden City Co. v. Valentine, 5 App. Div. 520.) We find nothing in the cases cited on the part of the defendants to the contrary of the views here expressed, as to the power of the assessors to increase the . úount of an assessment on such review by them.

In Apyar v. Hayward (110 N. Y. 225) the assessment of real estate of the corporation, for the correction of which application was made, was reduced, and the consequent increase of the assessed value of the stock of the corporation was held to have been within the judicial functions of the commissioners, as the result of the peculiar provisions of the statute applicable to the city of New York.

We have thus far proceeded to consider the question of power of the defendants to increase assessments without reference to the provision of the more recent “ Tax Law,” to the effect that on review the assessors may increase or diminish an assessment. (Laws of 1896, chap. 908, § 36.) This act, which took effect June 15, 1896, is a general one, containing provisions applicable to cities. It leaves *13sections 8 and 9, before referred to, of the Brooklyn city charter unrepealed. They provide for review by the assessors. While the applicability of that provision of the Tax Law of 1896 to the assessment in question, or to the city of Brooklyn, is questionable, by reason of the provisions of the charter on the subject, the determination of that question is unnecessary for the purposes of the present case, since, in the view taken, the result is the same, whether the increased assessment, as a whole, be deemed subject to review as erroneous, or the added portion be treated as illegal. The question is whether the assessment was erroneous. The relator made and delivered to the defendants, as. a board of assessors, a statement whereby it appeared that its capital stock actually paid or secured to be paid in was $3,423,400.

Its gross assets April 30, 1896, $6,293,784.56; and after making deductions for capital paid for United States patent rights, $845,000 ; for debts, so called, $1,747,614.82; for value of real estate, $3,203,691.06 and for assessed value of Brooklyn telephone lines as real estate, $110,127; making together $5,906,432.88; leaving as per statement subject to assessment, $387,351.68.

The assessors adopted the relator’s statement of its gross assets. In the alnount thus stated of them, it may, upon the undenied statement of the petition of the relator, and the evidence of the treasurer inferentially to such effect, be assumed was included the amount invested in United States patent rights. This amount was exempt from taxation and should have been deducted. (Commonwealth v. Westinghouse Mfg. Co., 151 Penn. St. 265; see opinion of Bartlett, J., in. People ex rel. Edison E. I. Co. v. Harkness and others [unreported].) Of the items constituting such statement of debts of the relator, the defendants excluded and disallowed those for accrued interest on mortgages, $2,220.12; accrued taxes, $11,561.35; accrued subway taxes, $3,164.37; amount charged off for depreciation, $15,438.31; unearned rentals, $185,212.69; unclaimed dividends, $5,264.25; making $223,862.60. It appears that, monthly, the relator charged up to its indebtedness one-twelfth of the accruing interest for one year upon its outstanding mortgage debts. This item in the statement represents the interest which had accrued on such debts during the first four months of the year. No reason appears why it may and should not be treated as a debt, although not then matured. A *14like fractional amount of estimated annual taxes it seems is entered monthly. This is a mere estimate, necessarily uncertain in amount; and was properly disallowed. The same may be said of the amount charged off for asserted depreciation in value of assets, because there is no proof in support of such depreciation in value. The unearned rentals consist of advance payments for telephone service, without, so far as appears, any option on the part of those making the payments to relinquish and have the amount paid refunded, but it seems that the right to repayment is wholly dependent upon the default of the relator, and as there is no reasonable ground to apprehend its failure since it has a fair surplus and pays seven per cent dividends on its stock, the advance moneys paid on rentals may properly be included in the assets of the relator. This differs essentially from uneai'ned premiums of insurance companies. In their case there is a contingent liability beyond the control of the companies to be estimated in making assessment of their personal property. The liability of the relator to repay the money so advanced is too slight, speculative and remote to require consideration. The unclaimed dividends are fixed sums which the relator is required to pay. They have been declared, and the stockholders are entitled to them on call. The amount of the dividends was properly allowed by the trial court. The assessed valuations were made by the defendants upon the basis of seventy per cent. Proceeding upon that basis, these views lead to the conclusion that the assessed valuation of the relator’s personal property at the time in question was $422,610.23.

It is urged on the part of the relator that ten per cent of its capital should have been deducted pursuant to the statute providing something to that effect. (Laws of 1851, chap. 456, § 3.) This was repealed by Laws of 1896 (Chap. 908) and its provisions substantially continued. (Id. § 31.) It may be that the relator would have been entitled to such deduction if the claim for it had been made on the application or proceeding for review. Ho such claim was then made, but, on the contrary, the statement submitted by the relator to the defendants recognized its liability to assessment for $381,351.68, which did not include any such deduction, and on the examination thereupon had of the representative of the relator he conceded that such should be the amount of the assessment. As the failure to deduct the ten per cent of the capital was not made *15the subject of grievance, objection or complaint founded upon the application for review and correction, it is not necessarily or properly the subject for consideration in this proceeding, nor did the relator seek to bring it to the attention of the court by any allegation in the petition for the writ therein.

The judgment appealed from should be modified by reducing the assessment, thereby adjudged, to the sum of $422,610.23, and as so modified affirmed, without costs of this appeal to either party.

All concurred, except Cullen, J., not sitting.

Judgment appealed from modified by reducing the assessment thereby adjudged to the sum of $422,610,23, and as so modified affirmed, without costs of this appeal to either party.