The material facts of this case are not in dispute, but are such as to make it necessary to determine the true meaning of section 46 of the Tax Law (Laws of 1896, chap. 908), added by chapter Yl2 of the Laws of 1899, known as the “ Special Franchise Tax Law.”
I concur in the conclusion reached by the majority of the court upon the questions presented by this appeal, except as to- the mean*293ing of and the effect which' should he given to the section of the statute referred to, which involves the question : Is a street surface railroad corporation, organized under the laws of this State, entitled to be credited upon the tax assessed against it in any year under the “ Special Franchise Tax Law,” with the amount which it may have paid the previous year to the municipality in which its road is located, under and by virtue of the bid which it made or the agreement which it entered into as a condition of obtaining its franchise from such municipality ?
The majority of the court are of the opinion that the amount thus paid by the corporation should be so credited, because such “ payment was in the nature of a tax,” within the meaning of section 46 of the Tax Law (supra). That section provides as follows : “ If, when the tax assessed on any special franchise is due and payable under the provisions of law applicable to the city, town or village in which the tangible property is located, it shall appear that the * * * corporation affected has paid to such city, town or village for its exclusive use within the next preceding year,under any agreement therefor, or under any statute requiring the same, any sum based upon a percentage of gross earnings, or any other income, or any license fee, or any sum of money on account of such special franchise, granted to- or possessed by such * * * corporation, which payment was in the nature of a tax, all amounts so paid for the exclusive use of such city, town or village * * shall be deducted from any tax based on the assessment made by the State Board of Tax Commissioners for city, town or village purposes, but not otherwise; and the remainder shall be the tax oh such special franchise payable for city, town or village purposes.” .
The defendant, Crosstown Street Railway Company of Buffalo, is a street surface railroad corporation. It was organized about the month of February, 1890, under and pursuant to chapter 252 of the Laws of 1884, as amended. Section 7 of that act provided, in substance, that the local authorities of any incorporated city or village of the State might, at their option, sell at public auction the “ franchise ” to construct, maintain and operate a street surface railroad upon any street, road, avenue or highway of such city or village. Section 8 required that in cities having a population of 250,000 or more1 (which included the city of Buffalo), the corporation obtaining such; *294franchise “ shall, for and during the first five years after the commencement of the operation of any portion of its railroad, annually, on the first day of November, pay into the treasury of said respective cities in which its road is located, to the credit of thé sinking fund thereof, three per cent of its gross receipts for and during the year ending the next preceding thirtieth • day of September,. and after the expiration of said five years, make a like annual payment into the treasury of said respective cities, for the credit of said sinking funds, of five per cent instead of three per cent of said gross receipts. * * * In any other incorporated city or village the local authorities shall have: the right to require, as a condition to their consent, * " * * the payment annually of such percentage of gross receipts, not exceeding three per cent, into the treasury of said city or village, as they may deem proper.”
Under the provisions of that statute any incorporated city or village, not having a population of 250,000, was authorized to sell at public auction a “ franchise ” for a gross sum to be paid in cash by the corporation purchasing the same; and on the same day to sell another “ franchise ” to a different corporation, and require it to pay annually a certain percentage of its gross yearly receipts. The two franchises might be substantially equal in value, and the purchase price or the sum bid for each might be practically the same, but in one case the. purchase price was required to be paid at once and in cash, and in the other the obligation of the corporation to pay a certain percentage of its gross receipts each year during its corporate existence was accepted in payment in lieu of a gross sum. Under that act it would have been entirely competent for the city of Buffalo to have sold such “ franchise ” to a railroad corporation for a gross cash sum, in addition to the percentages specified in the statute, and at the same time to have sold another “ franchise ” to a different corporation for a percentage of its gross receipts, in addition to the percentages of such receipts required by the statute to ^ be paid by the purchaser of such franchise. Section 7 of said statute was repealed by chapter 65 of the Laws of 1886.
Section 1 of chapter 65 of the Laws of 1886 imposed the obligation upon all incorporated cities and villages to sell such franchise “at public auction to the bidder who will give the largest percent, age per annum of the gross receipts derived from the operation of *295said railroad or railway, with adequate security as hereinafter provided for the payment of such percentage, provided that in cities having a population of two hundred and fifty thousand or more, such percentage shall in no case be less than three per centum per annum of such gross receipts, for and' during the period of the first five years of the operation of any portion of said railroad or railway, and five per centum per annum of such gross receipts after the expiration of five years.”
That act was amended by chapter 642 of the Laws of 1886, but its requirements were not materially changed in any respect important to note, except that by an amendment of section 2 thereof its provisions did not, except in an immaterial instance, “apply to companies now organized or hereafter to be organized for the purpose of building elevated railroads in counties having less than one million inhabitants, nor to street surface railroad companies heretofore organized in cities or villages of less than forty thousand inhabitants.”
Section 1 of the statute, as amended, prescribed with great detail the manner in which the sale of such franchises must be made and how advertised, and provides: “ The comptroller or other chief fiscal officer of the cities, and the president of the board of trustees in villages, shall attend and conduct the sale * * * and may cancel the bid if the bidder shall not furnish satisfactory security, and sell the said consent and license in the same manner as above provided.”
Section 1 of chapter 65 of the Laws of 1886, as amended by chapter 642 of the Laws of 1886, was again amended by chapter 564 of the Laws of 1889, but none of the provisions involved in this controversy were changed by such amendment.
In 1890 the “ Railroad Law ” was passed, being chapter 565 of the Laws of 1890. Section 91 of that act provides that a street surface railroad shall not be built or operated upon the streets of a city until the consent of the municipal authorities is obtained. Section 93 provides that the consent of the municipal authorities in cities containing 90,000 inhabitants or over must contain the provision “ that the right, franchise and privilege of using any street * * * shall be sold at public auction to the bidder who will agree to give the city the largest percentage per annum of the gross receipts of *296such corporation, with a bond or .undertaking in such form or amount and with such conditions * * * for the fulfillment ..of such agreement. * * *” Provision is also made for giving notice of or advertising such sale.
Section 95 provides: “ Every corporation building or operating a railroad, constructed or extended under the provisions of - this article, or of chapter two hundred and fifty-two of the laws of eighteen, hundred and eighty-four, within any city of this State having a population of two hundred and fifty thousand or more, shall, for and during the first five years * * * annually * * * -pay into the treasury, of the city in which its road is located, to the-credit of the sinking fund thereof, three per cent of its gross receipts, * * * and after the expiration of such five years * * "" five per cent of the gross receipts.”
It will be seen that, as applied to the city of Buffalo, the statute of 1890 practically re-enacted chapter 65 of the Laws of 1886, as amended, and required a franchise, in that city, like the one in question, to be sold at public auction to the highest bidder, and that in that event the corporation purchasing the same was required to pay to the city the three and five per cent (as the case might be) upon its gross receipts specified in the statute of 1886.
The whole subject of the compensation which corporations should be required to pay to municipalities for franchises of the character here involved, was again considered by the Legislature in the year 1892, with the result that chapter 676 of the Laws of .1892 was enacted, which was an amendment of “The Railroad Law” of 1890. Section 180 of the law of 1890 repealed chapter 252 of the, Laws of 1884, section 1 of chapter 65 of the Laws of 1.886, chapter 642 of the Laws of 1886, and also chapter 564 of the Laws of 1889. So that “The- Railroad Law” of 1890, as amended in 1892, contained the only statutory provisions relating to the compensation which was or might be required to be paid by a railroad corporation to a municipality for the right or franchise to construct and operate a railroad upon its streets or avenues. Section 90 of “ The Railroad Law,” as amended in 1892, provides.: “A corporation-.organized since May 6, 1884 (the defendant railway company w-a's. organized in 1890), for the purpose of building and operating -.or extending a street surface railroad * * * upon .and along any street, *297avenue, road or highway in any city, town or village, * * * must comply with the provisions of this article.” Section 91 provides: “ Such railroad shall not he built, extended or operated unless * * * the consent of the local authorities * * * shall have been first obtainéd.”
Section 93 provides: “ The consent of the local authorities in cities containing twelve hundred and fifty thousand inhabitants * * * must contain the condition that the right, franchise and privilege * * * shall be sold at public auction to the bidder who will agree to give the city the largest percentage per annum of the gross receipts of such corporation, with a bond or undertaking * *
It is further provided in such section as follows: “ Ho thing herein contained shall be construed as applying to or affecting or modify-, ing the terms of a certain contract bearing date January 1, 1892, entered into by and between the city of Buffalo and the various street surface railroad corporations therein named in such contract.” Which is the Milburn agreement, and will be referred to later.
Section 95 provides that every corporation building or operating such a railroad under that act or the statute of 1884, in cities having a population of 1,200,000 or more, shall pay to such city three or five per cent of its gross receipts, as the case may be, substantially as provided by section 1 of chapter 65 of the Laws of 1886, as amended. The section further provides as follows : “ In any other incorporated city or village (having a population of less than one million two hundred thousand) the local authorities shall have the right to require, as a condition to their consent to the construction, operation or extension of a railroad under the provisions of this article, the payment annually of such percentage of gross receipts, not exceeding three per cent, into the treasury of the city or village, i as they may deem proper. * * * ”
The law of 1892 is the last material enactment of the Legislature bearing upon the subject. We have now as far as necessary called attention to the various statutes relating to the authority of municipalities to sell the right, franchise or privilege to construct and operate street surface railroads upon the streets and avenues of such municipalities, from the year 1884, when chapter 252 of the Laws of 1884, under which the defendant railway company was organized, *298to the present time, and it will be observed that while there have' been numerous changes in the law, few of them have affected the city of Buffalo, and none of them the appellant railway company.
To recapitulate: Under the act of 1884 the city of Buffalo might, at its option, sell at public auction the “ franchise ” but, whether or not it was so sold, the corporation obtaining the same was required to pay annually therefor three or five per cent (as the case might be) of its gross receipts into the treasury of such city for the credit of the sinking fund. By section 1 of chapter 65 of the Laws of 1886, as amended by chapter 642 of the Laws of 1886 and chapter 564 of the Laws of 1889, it was made mandatory upon the city of Buffalo to sell the “ franchise ” at public auction to the highest bidder, and the corporation bidding the same was required to pay the percentage fixed by the act of 1884 in addition to the amount of its bid. “ The Railroad Law,” being chapter 565 of the Laws of 1890, did not affect the city of Buffalo or a corporation obtaining a franchise to construct and operate a railroad upon the streets of that city. Under section 95 of “ The Railroad Law,” as amended in 1892, the city of Buffalo still had the right to require, as a condition of granting a “ franchise,” “ the payment annually of such percentage of gross receipts,' not exceeding three per cent, into the treasury of the city * * * as they may deem proper; ” but besides, as we have seen, it was expressly provided by section 93 that none of the provisions of the article should affect the obligation assumed by the appellant railway company under the contract which it entered into with the city of Buffalo, known as the “ Milburn agreement.”
In this connection it may be observed that the Legislature, ever since the year of 1884, and after, as well as before, the passage of the “ Special Franchise Tax Law” in 1899, required or authorized the incorporated cities and villages of the State, including the city of Buffalo,.to sell a “ franchise ” to the highest bidder, a corporation bidding the highest percentage of its gross annual receipts therefor; and in no event, at the option of said municipality, to be less than three per cent of such gross receipts. In other words, there has been' no time since the passage of the act in 1884, under which the appellant railway company was incorporated, when it could not have been required to pay at least three per cent of its gross annual receipts for the franchise granted to it.
*299Prior to the month of February, 1890, one of the street railway companies of the city of Buffalo, under and pursuant to chapter 65 of the Laws of 1886, as amended, made application to the city of Buffalo for a franchise to construct, maintain and operate a street surface railroad upon certain streets and avenues in said city. All the provisions required by statute having been complied with, on or about the 6th day of February, 1890, the city of Buffalo sold such franchise at public auction to appellant railway company, at its bid of eleven and three-fourths per cent of its gross annual receipts, payable annually, in addition to the three or five per cent required to be paid under section 1 of chapter 65 of the Laws of 1886, as amended. The appellant railway company being the highest bidder, such franchise was struck off or sold to it at the price bid, and such railway company thereupon executed to the city of Buffalo a bond or undertaking in the penal sum of $200,000, conditioned for the payment by it of the percentage bid by’ it, and for the faithful performance of other conditions imposed upon it by the purchase of such franchise. Immediately thereafter the appellant railway company having executed the undertaking required, which was duly approved by the city, entered upon the construction of its railroad, completed it and has ever since been engaged in operating the same.'
Before and after the defendant railway company had obtained the franchise from the city of Buffalo to construct and operate its railroad in certain streets of said, city in the manner above indicated, other corporations, to wit, the West Side Street Railway Company and the Buffalo Railway Company, had obtained franchises from said city, authorizing them respectively to construct and operate their railroads upon other streets of said city. The Buffalo Railway Company was under no obligation to pay anything to said city of Buffalo for its franchise, and had a right to charge a transfer fare of three cents for each passenger transferred from the cars of one of its lines to those of another. The appellant railway company charges a full fare of five cents for each passenger riding over any of its lines, whether transferred or not to another line. The West Side Street Railway Company had agreed, upon the purchase of its franchise, to pay thirty-six and one-sixteenth per cent of its gross receipts in consideration of the “ franchise ” granted to it. Other conditions existed which authorized said companies to exercise such *300rights or privileges as rendered the street surface railroad service of the city of Buffalo unsatisfactory. Thereupon the said three corpo-; rations, to wit, the appellant railway company, the Buffalo Railway Company and the West Side Street Railway Company, entered-into negotiations with the" city of Buffalo looking to a readjustment of the percentages which they had respectively agreed to pay, and a modification of then rights and privileges. Such negotiations resulted in an agreement by which all transfer charges or double fares were abolished, and certain other things specified in said agreement by said companies were to be done and performed, which were regarded as beneficial to the city of Buffalo and its inhabitants. In consideration of the covenants and agreements on the part of - such railway companies, the city of Buffalo consented that they should be relieved from paying the percentages which they had respectively agreed to pay, and from certain other obligations which they had assumed, and in lieu thereof it was agreed (so far as is important to note) that such companies should pay annually to the city of Buffalo two and one-half per cent of their gross receipts for the payment of the total amount of which each of said companies became jointly ' and severally liable. Such agreement, which is called the “ Milburn agreement ” in the record, was ratified by act of the Legislature, being chapter 151 of the Laws of 1892, and thereupon concededly became binding upon all the parties to it. Under said agreement the appellant railway company became liable to pay to the city of Buffalo for the year ending June 30, 1900, $13,480.45, being two and one-half per cent of its gross receipts for that year, and it actually paid into the city treasury that sum.
. Under the “ Special Franchise Tax Law ” (Laws of 1899, chap, 712) the State Board of Tax Commissioners determined the value of the special franchise of the appellant railway company to be $2,455,735 for the purposes of taxation for the fiscal year 1900-1901, Certiorari proceedings were instituted by the appellant, and resulted in a determination that its franchise was only of the value of $1,719,014, and it was finally adjudged to be that amount. Upon such valuation there was duly assessed against the appellant railway company, as and for its franchise tax, payable to the city of Buffalo, the sum of $29,463.33. There was added to that sum $1,854.70 as a lamp tax, imposed under the provisions of title 19 of chapter 105 *301of the Laws of 1891, being the charter of the city of Buffalo, as amended, so that the total amount of the tax imposed upon the appellant railway company, payable to the city of Buffalo upon the valuation of its franchise, was $31,318.03. Before the commence^ ment of this action the appellant railway company tendered to the city of Buffalo that amount, less the sum of $13,480.45, which it had paid pursuant to the terms of the Milburn agreement, to wit, the sum of $17,837.58. The city of Buffalo refused to accept such sum in payment of the franchise tax assessed against the appellant railway company ; thereupon this action was brought to recover the amount. The judgment appealed from decreed that the city was entitled to recover the full amount of such franchise tax, togetherWitli the percentages imposed by section 76 of the charter (as amd. by Laws of 1898, chap. 313) because of the non-payment of the same when due, and determined that the appellant railway company was not entitled to offset, as against such sum, the $13,480.45 which it had paid the previous year under the Milburn agreement. In other words, it was held that the $13,480.45 so paid was not in the nature of' a tax, and, therefore, that the appellant railway company was not entitled to be credited with that amount upon its franchise tax. Thus the question is squarely presented, whether or not the appellant railway company is entitled to credit for the sum which it paid, pursuant to its agreement, for the purchase of the franchise obtained by it, as against the amount assessed against it under the “ Special Franchise Tax Law,” upon the ground that the percentage of its gross receipts which it agreed to pay upon the purchase of such franchise “ was in the nature' of a tax.”
It must be admitted that the $13,480.45 paid by the appellant railway company, under and pursuant to the terms of the Milburn agreement, was in lieu of the amount which said company had obligated itself to pay upon the purchase of the franchise in question. It seems to me that the amount so agreed to be paid was in no sense a tax or “ in the nature of á tax/J but that it was the purchase price of the franchise obtained from the city of Buffalo. Such a franchise is property (People v. O’Brien, 111 N. Y. 1), and by the express provision of the “ Special Franchise Tax Law ” is made real property; .so that by the provisions of chapter 65 of the Laws of 1886, as .amended, the city of Buffalo was authorized to sell “ property ” to *302the corporation bidding the highest price therefor, and it-was charged with the duty of seeing to it that it obtained therefor the largest possible price. The appellant railway company, upon the sale of such property, was the highest bidder. It agreed, in consideration of the sale to it of such property, to pay annually a certain per cent of its gross receipts. The bid made by it was voluntary. Others were bidding in competition, all seeking to obtain the thing offered for sale at the lowest price.
Under certain statutes the Legislature authorized the city of Buffalo to sell a “ franchise.” Under other statutes or the common law it had the right to sell other property which it owned or possessed. The purchase price of either represented the value of the thing sold, and had none of the characteristics of a tax. If the city of Buffalo is the owner of and has the right to sell a plot of ground, and sells it at public auction, can it be said that the sum bid for it, the purchase price, is “ in the nature of a tax ? ” The city of Buffalo was authorized — and not only authorized but required — to sell at public auction its consent to construct and operate a railroad upon certain of its streets. Such consent was advertised and was offered for sale in accordance with the provisions of the statute. Upon such •sale the appellant railway company bid a certain percentage of its gross earnings for the consent thus offered. The amount which it bid was the purchase price of the thing sold,, and was in no sense a tax or “ in the nature of a tax,” but was the purchase price, pure and simple, of the property which the appellant railway company obtained. The circumstance that the price bid was based upon gross receipts, or was to be determined in some other way, rather than a gross sum, cannot change the character of the transaction. In either event it was the purchase price.
Independent of the general proposition, it is proper to ascertain, if possible, the legislative intent in enacting the statute in question. Notwithstanding the language, if it clearly appears that the Legislature intended to relieve street surface railroad companies from paying to municipalities the amount which they agreed to pay when they obtained their respective franchises, in case the amount was based upon gross receipts, by. crediting the same upon the tax imposed upon their respective franchises, under chapter 712 of the . Laws Af 1899, then such corporations should be credited with, the *303amounts so paid by them. We think, however, that such was not the intent cf the Legislature, and that a contrary intention is clearly manifested. In the first place, it is hardly conceivable that the Legislature intended to relieve a corporation from the payment of the amount which it agreed to pay for its franchise, if such amount was based upon percentages of its gross receipts in any previous year, and that a corporation which had paid a gross sum in cash in the same year for a like franchise should have no relief or credit.
Again, it would seem to be unreasonable that the Legislature should have required a municipality to sell a “ franchise ” at public auction to the highest bidder, impose upon it the duty of obtaining the highest price possible therefor, and then enact that the purchase price should, in any event, be credited to the purchaser upon a tax subsequently imposed by statute. In the case at bar the city of Buffalo presumably obtained for the franchise sold to the appellant railway company the best possible price, as it was required to do under the statute, which was two and one-half per cent of its gross annual receipts ; but, according to the appellant railway company’s contention, the city would have been quite as well off if it had sold the franchise for one dollar, payable annually, instead of $13,480.45, because in one case there would have to be deducted from the franchise tax only, one dollar, and in the other the sum of $13,480.45. In other words, if the contention of the appellant is to prevail, it was entirely immaterial to the municipality whether the “ franchise ” sold for little or much, so long as the purchase price was less than the amount of the franchise tax.
In the case at • bar, as we have seen, the appellant railway company obligated itself, under the Milburn agreement, to pay two and one-half per cent of its gross receipts annually to the city of Buffalo. As appears by the record, that percentage was agreed upon after much negotiation, and after the municipality had done its best to obtain a larger amount, and the appellant railway company had used its best efforts to make the percentage as small as possible. Yet, if the contention of the appellant is to prevail, there need have been no controversy between the contracting parties as to the amount of the percentages. The appellant railway company might just as well have agreed to pay five or seven per cent of its gross receipts, because the full amount of such percentages would have *304been credited upon the tax imposed by the “ Special Franchise Tax Law.” If such is the construction, meaning and'intent of section 46 of the Tax Law (supra), why should a corporation bidding for a franchise haggle about the amount of the percentages to be paid by it, if- the amount of such percentages is, in any event, to be credited upon its franchise tax ?
Attention has been called in the prevailing opinion to a message of the Governor to the Legislature prior to the passage of the act of 1899, indicating that it was his thought that the purchase price of franchises, if payable in percentages upon receipts, should be deducted from the franchise tax,* but in that connection it is important to note that the Legislature has continued to impose upon certain municipalities the duty of selling such franchises at public auction to the highest bidder,
Under the statute of 1890, as amended, any city having a population of 1,250,000 or more must sell at public auction, to the corporation bidding the greatest percentage of its gross receipts, a franchise authorizing such corporation to construct, maintain and operate a railroad upon the streets or avenues of such city. The sum so bid must be paid into the treasury of such city for its purposes. Did the Legislature intend that the sum so required to be paid should be deducted from the tax imposed upon such corporation by the Special Franchise Tax Law, or credited to it upon such tax % If so, as we have seen, it is unimportant what the amount of the bid is, because whether little or much it is to be deducted from the franchise tax assessed against such corporation.
Under the law as it stood when the appellant railway company obtained its franchise, it was competent for the local authorities of any of the cities or villages of the State, not having a population of 250,000, to sell a franchise for a gross sum payable in cash.' The city of Buffalo was required by the statute to sell such franchise for a percentage upon the gross receipts of the corporation purchasing the same. Was it the intent-of the Legislature that in other cities than those having a population equal to the city of Buffalo, the corporations which bought such franchises and paid cash therefor should not have relief, or be entitled to any credit because of the amount so bid by them; and that the corporations purchasing such franchises in cities having a population - of 250,00.0 or more, and *305agreeing- to pay a certain percentage of their gross annual receipts therefor, should be entitled to be reimbursed annually for the total percentage or amount so agreed to be paid by them? We think such was not the legislative intent when it passed the Special Franchise Tax Law (Laws of 1899, chap. 712).
The provisions of the Special Franchise Tax Law are entirely harmonized and the course of the Legislature relating to the sale of franchises by municipalities is entirely consistent, unless it is determined that the purchase price of such franchises is “ in the nature of a tax.” It may be inquired what was the purpose of the language used in the statute ? Ho better answer could be made than to say that the “lamp-tax” imposed by section 414 of the charter of the city of Buffalo is covered by it. In some cities a license fee had been imposed upon each car of a street surface railroad, and various other taxes or license fees were imposed upon such corporations, some of them as police and others as health requirements. Concededly all such taxes, license fees or what not, should be deducted from the tax imposed by the Special Franchise Tax Law, but we fail to see why or how the purchase price of a franchise should be so deducted. It seems to me a farce to require a municipality to sell a franchise at public auction, charge it with the duty of obtaining the highest possible price therefor, if it, in fact, is to make no difference to such municipality whether the price paid is little or much.
Under the law of 1892 the great street surface railroad corporations of the cities of Hew York and Brooklyn were required to pay a certain percentage of the gross annual receipts to the cities in which their respective railroads are located, amounting annually to many thousands of dollars. I think it was not the intention of the Legislature, when it passed the Special Franchise Tax Law, to practically relieve such railroad corporations from the payment of the percentages which they agreed to pay to such municipalities, upon obtaining their respective franchises.
Under an amendment of section 34 of the Rapid Transit Act (Laws of 1891, chap. 4, added by Laws of 1894, chap. 752, and amd. by Laws of 1900, chap. 616), passed the year following the passage of the Special Franchise Tax Law, corporations organized under that act were required to pay a very large percentage of their earn- ' *306ings to the municipalities in which their railroads were severally located. If the section of the-statute in question is to hear the construction given it by the prevailing opinion, then such corporations are entitled to have such percentages credited upon their franchise taxes. We do not believe that such was the legislative intent.
Prior to the passage of the Special Franchise Tax Law the property of the defendant railway company (and like corporations) was presumably assessed at its full value. In making such assessment not ouly the value of its rails, cars, buildings and lands was taken into consideration, but also its earning capacity. The assessment was supposed' to represent the value of the railroad, as such, and upon such valuation the defendant paid taxes, and, in addition, it paid annually to the municipality the amount which it bid upon securing its franchise. The valuation of the defendant’s railroad, as assessed under the Special Franchise Tax Law, might not be materially increased, and yet, if appellant’s contention is to prevail, such corporation might be substantially relieved from taxation, because credited with the amount which it agreed to pay annually to the city for the use of certain of its streets. If such is the necessary result of the act it might properly be denominated an act for the relief of certain street railroad companies, which had agreed to pay a considerable percentage of their gross earnings to the municipality from which they obtained the. right to. operate their respective railroads.
The question involved in this appeal is important, and the effect of the decision will be far-reaching. If the decision about to be announced is correct, practically every street surface railroad in the State will be relieved from the payment of any and all sums which they have agreed to pay to thé municipalities for their franchises, provided such amount does not exceed the special franchise tax. We cannot assent to the proposition that it was the intent of the Legislature in passing the Special Franchise Tax Law to cancel all such obligations. The effect of the decision, as announced by the majority of the court, is that the purchase price, the amount bid by any corporation, for any franchise, if less than or only equal to the tax assessed against such corporation, must be deducted therefrom, because, and solely upon the ground that, such purchase price is “in the nature of a tax.” We cannot assent to such an interpretation of the law, for the reason that, as it seems to_ us, it is unjust *307and inequitable; and, further, that it is not warranted by the plain reading of the statute, because there is no basis for the claim that the amount voluntarily bid and agreed to be paid for a franchise, for property, for the right to use the streets of a municipality, is a tax or “ in the nature of a tax.”
The lamp tax, amounting to $1,854.70, was a tax within the meaning of the statute referred to, and the judgment appealed from should be modified by deducting therefrom that sum, and as so modified it should be affirmed, with costs.
Hiscock, J., concurred.
Judgment and order reversed and new trial ordered, with costs to the appellant to abide event, upon questions of law only, the facts having been examined and no error found therein.