80 N.Y.S. 85 | N.Y. App. Div. | 1903
Lead Opinion
The first question presented by this appeal is whether the provisions of the law which authorize the assessment and tax complained of are violative of section 2 of article 10 of our State Constitution. Such act, being chapter 712 of the Laws of 1899, first amends subdivision 3 of section 2 of the Tax Law (Laws of 1896, chap. 908) by adding to the subjects of taxation therein specified the right or franchise to construct, maintain or operate upon, over or under the streets, highways or public places of any town or municipality in the State the tangible property thereon which was. already specified in the section as being real estate, and, therefore,, assessable. The value of such tangible property, plus the value of the - right to maintain or operate the same, is thereafter to be-assessed and taxed together, and is denominated in the act as a. “ special franchise.”. No criticism is made that this addition to the-taxable property named in the section violated any provision of the-Constitution, but the act further provides that the assessment of such special franchise shall be made by the State Board of Tax. Commissioners. That board is required to fix the valuation of all such special franchises wherever found in the State and to report such assessment or valuation to the proper local assessor, and such-local officer is required to place such special franchise upon his roll of the taxable property in his district at the valuation so received,, and the tax is thereupon levied and collected against the same in the same manner and for the same purposes as against the other-property on such roll.
This provision, if is claimed, violates the above-cited section of.'
In People v. Raymond (37 N. Y. 428) this section, which is familiarly known as the home rule provision of the Constitution, received judicial construction in its application to the subject of assessment for the purposes of taxation.
In that case the Legislature, by chapter 410, Laws of 1867, sought to transfer the duties of the commissioners of taxes and assessments for the city of Xew York, who were officers appointed by local authorities, to a board of three commissioners appointed by the Governor, by and with the consent of the Senate. At the time of the adoption of the Constitution of 1846, such duties of assessment were, and for a long time had been, performed by district assessors. By various acts passed in 1850, 1857 and 1859, the Legislature had regulated the performance of such duties and changed the officers who were to perform them. But in each instance the selection of such officers was left to local authorities. The act of 1867, however, sought to change the selection of such officers from the city to the State, and it was at once challenged as being violative of the home rule provision of the Constitution. The question came before the court in the case above cited, and it was there distinctly held as follows: That beyond controversy the office in question was exclusvoely a city office $ that the duties imposed by the act upon the new board, although broader in their extent, were essentially the same as those exercised by the city assessors in 1846; that the plain intent of the section of the Constitution in question “was to preserve to localities the control of the official functions of which they were then possessed, and this control was carefully preserved, consistent with the power of the Legislature to make needful changes, by restricting the power of appointment of other officers to perform the same functions to the people, or some authority of the locality.” That, hence, the act of .1867 deprived the people of the city of a right seemed to them by the Constitution, and was, therefore, void.
This case has never been reversed or modified, so far as I can ascertain, and would, I think, be conceded by the respondent in
But in what respect does that case differ, in principle, from the one before us % There the act sought to transfer from local assessors to those, appointed by the State authorities the. duty of assessing all the property in the city of New York. The decision is that the Legislature was without authority to do that thing; that the function of assessing such property was, by the Constitution, secured to officers selected by the locality. The act before us does not transfer the duty of assessing all the property in the various tax districts to the State assessors, but only all of a certain specified kind. Now, if the Legislature is without authority to transfer the duty of assessing all, I am at a loss to discover whence it gets the right to interfere with the assessment of any part of such property. The right to have all the property in its locality assessed by officers chosen by itself was secured to each town and municipality in the State by the constitutional provision in question; and, in my judgment, the Legislature has no more power, to infringe upon that right by withdrawing from its operation one particular species of property than it has to withdraw a dozen. It is clear that by the statute before us the right to assess a distinct kind of property in every district, and in some localities a very considerable portion thereof, is transferred from local to State assessors; and this transfer would seem to be as unwarranted as was the transfer attempted by the statute of 1867, which the Raymond case condemned.
It would seem that such decision “ absolutely dominates ” the case before us, and should control our disposition of the same. And so it does, even in the judgment of the learned jurist whose decision as referee was adopted by the court at Special Term, and whose opinion is now before us, were it not that he sees a distinction in the fact that the amount of property transferred from local to State assessment is, in every instance, very small as compared with the whole amount of property taxed, and in some, localities does not amount to anything. All of the principles decided in the Raymond case he seems to adopt, but he sustains the act before us upon the theory that it does not substantially interfere with the home rule principle, which it is the purpose of this section of the Constitution to protect. The argument is, that it does not take away from the
In People v. Draper (15 N. Y. 532), which is one of the earliest cases to adjudicate upon this section, the validity of a law was in question which created a new metropolitan police district from the county of Xew York and three adjacent counties, and which provided for the appointment by State officers of the commissioners therein and abolished the existing police departments of the several municipalities within such district. That case sustained the act on the ground that the State had authority to create new civil divisions for police purposes, and to administer through its own officers the duties and regulations prescribed for the same. It distinctly held that, had the act applied to the city of Xew York alone, it could not have been sustained; but it denied that the Constitution assumed that the subject of police was localized in the several cities and counties of the State. It held that “ as a political society, the State has an interest in the repression of disorder and the maintenance of peace and security in every locality within its limits, and if from exceptional .causes the public good requires that legislation, either permanent or temporary, be directed toward any particular locality, whether consisting of one county or of several counties, it is within the discretion of the Legislature to apply such legislation as in its judgment the exigency of the case may require, and it is the sole judge of the existence of such causes.” Hence it treated the authority of the State upon the subject of police as paramount over that of the localities, and substantially held that for such reason no exclusively local function had been interfered with. As to such functions there was in fact no right of home rule to be preserved to the localities. And this is the principle which pervades and controls all the cases relied upon by the court below. In People v. Shepard (36 N. Y. 285) the act was held good upon the same principle;
Upon the same principle statutes concerning excise (Metropolitan Board of Excise v. Barrie, 34 N. Y. 657), and the preservation of the public health (Metropolitan Board of Health v. Heister, 37 id. 661) were sustained. So those authorizing the construction of public-parks, avenues and even a court house by commissioners named by the State have also been sustained, even though such construction was within the scope of the functions of local officers. (Astor v. Mayor, 62 N. Y. 567; People ex rel. Kilmer v. McDonald, 69 id. 362; People ex rel. Kilmer v. Cheritree, 6 T. & C. 473; Hanlon v. Supervisors of Westchester, 57 Barb. 383.) But the foundation of each decision has been that the .State had a parar mount right to direct the work to be done, and hence could do it through its own instrumentalities. This is especially made clear by the reasoning of the opinion in People ex rel. Commissioners, etc., v. Supervisors Oneida (170 N. Y. 108).
My analysis of these cases is made only for the purpose of ascertaining how far they sustain the principle upon which the court below has decided this case. Whatever criticism has been or may be made of any of them is quite unimportant to this case, so long as it is apparent that in none of them is the decision placed upon the ground that the infringement complained of was not sufficient to substantially imperil the principle of home rule. • In many of them the functions of the local officer were entirely transferred, and in each of them the controlling principle has been that the act of the Legislature did not invade any right or function that was exclusively local in its character. In each instance it was held or assumed that; the State had the paramount right to control the subject affected by the act, and hence that there was no invasion of local functions. As is said in the very excellent and scholarly brief submitted by the-appellant’s counsel on this question, it has been the nature of the power sought to be conferred upon the State officers that has controlled the decisions of the court.
A broader and bolder position, however, was taken upon the argument of this appeal. It was there said that no authority can be found for the claim that the assessment of property for local taxation is a function exclusively appertaining to local officers, and that the State has the same power to take from a local officer his duties and transfer them to a State officer as it had to take from the police commissioners of the city of Xew Tork their duties and transfer them to officers of a department of the State. In short, that its power over the subject of assessment is as paramount as is its power over all the several subjects referred to in the cases above cited, and that while the Constitution prohibits the State from filling a local office, which, at the time of its adoption was filled by election or appointment by local authorities, yet it does not prohibit it from abolishing such local office and transferring the duties of that office to an officer of the State at large; that it may take to itself the performance of any, or all, the functions of the local office, but it may not name the local officer to perform them ; and so far as the question now before us
Moreover, the Raymond case, above cited, is a direct authority against such view. As shown above, it declares that the plain purpose of the section was to preserve to localities the control of the official functions of which they were possessed at the time it was passed, and that “ any other construction would render the section in question, when applied to the cities of the State, substantially nugatory.” Undoubtedly at that time assessors of the localities were the only ones whose duty it was to assess property for local taxation. If the power to make such assessments may be now transferred to a State officer the control of the localities over that subject is as much taken away as if it were transferred to a local officer named by the State, and thus the purpose of that section is evaded. Clearly the Raymond case proceeds upon the theory that the duty of assessing local property for the purpose of local taxation was exclusively a function of the local assessors, and, hence, is authority for the claim that such duties may not be transferred by the Legislature to any officer whatever who is not chosen by the localities themselves.
Its argument is that the amount of property, the assessment of which is transferred from local to State assessors by this act, is so inconsiderable a portion of the whole that, as a matter of fact, neither of the localities is “ in any material manner deprived of local self-government.” That, therefore, their home rule rights are not “ substantially invaded,” and, hence, it does not at all infringe against the constitutional prohibition.
But the question is not whether such transfer affects their home rule rights or their local self-government “ materially ” or “ substantially,” or, as I understand the argument, to an extent sufficient to do them any harm ; but whether it does or does not amount to a direct and actual invasion of such rights. Beyond controversy this act takes away from the local assessors the function of assessing a certain kind of property, and transfers it to. the State Board of Tax Commissioners, and to this extent makes such board perform the functions of a local officer; and if we sustain this act we must sustain their authority to do that very thing. But this is the very thing that the Constitution says they may not do. Officers appointed by State authority may not'be authorized to perform the functions of an office exclusively local. Clearly, the invasion which we would thus sustain, if repeated, would ultimately transfer the whole function of assessment from local to State officers; and so it would seem that the first invasion is as much a violation of the constitutional prohibition as would be the one that transferred the last remnant of property remaining to the local assessor.
I cannot agree that the principle of home rule is not endangered because the courts may tell the Legislature that it has intruded upon it far enough. Such is not the constitutional scheme for its protection. That instrument declares what the Legislature may not do; They may not transfer the functions of a local office to State officers. If an act of the Legislature attempts to do that, presumptively it is a dangerous invasion of the home rule principle — certainly it is a prohibited one. It is a question of authority on the part of the Legislature. Concededly it would not be authorized to so transfer, by other acts, many other specified kinds of property. Concededly the time would come when, to save to localities their
It is suggested that so much of thé “ special franchise ” as consists of the mere right to operate the tangible property in streets and public places has never heretofore been the subject of taxation, and that as to such new property the' act in question, by depriving the local officei'S of the right to assess it, takes no right from them that they ever had before, and hence the principle of home rule is not involved.
But it has been the duty of local assessors ever since the office existed to assess all property in their district that was liable: to taxation, and. they were .the sole and only officers upon whom such duty was imposed. The Legislature from time to time, as new species of property have come into existence, has imposed-the burden of taxation upon them, yet it did not need .an act of the Legislature to enable the assessors to ■ assess such new property. That duty devolved upon them as soon as the property was declared taxable, by virtue of the long-existing and well-recognized function of their office, and it is this very duty of assessing all the property in a locality upon which the Legislature shall impose the obligation of paying a local tax that the localities insist should be exercised by officers chosen by themselves. The functions of the office are neither enlarged by an addition of property, to the tax list nor are they diminished by a removal of property from that list. Undoubtedly the Legislature has the power to< do either, but the function of the assessors’ office remains the same. The right and the duty of the assessors to assess whatever property in their district, the Legislature shall declare taxable for local purposes is the long-existing and assured function of that office which is sought to be preserved. Therefore, when the Legislature deemed it wise to add to the taxable list the so-called “ special franchise,” thé duty of assessing it devolved at once upon the local assessors. Its creation at once brought it within the scope of their official duties. By virtue of the functions of such office .it became the duty of the assessors to assess' it. It is true that the assessors have never heretofore had the -opportunity of assessing- such property. It has never been made taxable and so brought within the scope of. their duties, -but their
Moreover, a considerable portion of the “ special franchise ” consists of tangible property that has long been assessed by the local officers. In the city of Xew York alone it amounts to something over §76,000,000: All such property the law in question withdraws from the assessment by local assessors. It is argued that such property is a mere adjunct to the franchise or right to use it, and that as the duty of assessing such right may be taken away, the duty of assessing its adjuncts must go with it. As said above, this is a question of power in the Legislature, and I am unable to understand how that body gets the power to withdraw the tangible property from local assessment by merely requiring it to be assessed with the intangible right to use it. It cannot do indirectly what it may not do directly. It has no more power to add it to intangible property and so withdraw it from local assessment than it has the power to withdraw it directly from such assessment.
I am forced to the conclusion that so much of the act in question as provides for the assessment of a special franchise by the State Board of Tax Commissioners is unconstitutional and void.
I am not unmindful of the importance of this question. The great interest which the taxpayers of the State take in this effort to subject to the burden of taxation a very large amount of property which undoubtedly is of immense value to its owners, and the disappointment which will naturally accrue to them, through its failure, and to those legislators who evidently adopted this plan as the one best calculated to protect alike the owner and the public, is fully appreciated by me. But this court does not enter as a pioneer upon-the consideration of this question. Every principle involved in it. has been settled by the Court of Appeals, and we may do. no more than recognize and enforce such principles in their application to this case. As stated above, in my judgment the decision in the Ba/ymond case absolutely dominates this case.
Chase, J., concurred; Kellogg, J., concurred in an opinion; Smith and Chester, JJ., dissented in opinions.
Concurrence Opinion
The question of the constitutionality of the so-called “ special franchise ” amendment of the General Tax Law is approached with no little hesitancy, owing to its importance, also to the fact, that it has been discussed and determined by an able jurist, the learned referee appointed herein, and the further fact that the • question is avowedly on its way to the Court of Appeals where alone the question can be finally answered. Counsel on both sides have very ably and with evident conviction argued this question before us and insist upon the deliberate judgment of this court unbiased by what has gone before or what may come after, and we are, therefore, called upon to .express our independent convictions and briefly state the grounds upon which they are based.
The learned referee has held that assessing property for the purpose of taxation under the General Tax Law of the State is a local function and can be exercised only by local assessors elected by the electors of the locality or appointed by the local authorities. He says: “ The assessment of property for the purpose of taxation has always in this State been a function of local officers elected or appointed in the locality where they discharged their duties, and this system of assessment is entrenched in the Constitution to secure to the people the home rule to which they had always been accustomed and of which the people of our race have always been tenacious.”
This must mean that the Legislature has not the power to take from the local assessors this function and settle it upon an individual or body appointed by the Legislature. It is not a function which the Legislature has power to change from a local to a State function. This conclusion of the learned referee is supported by the Court of Appeals in People v. Raymond (37 N. Y. 428) and by every case in that court in which' the question of assessment of property for purposes of general taxation has directly or indirectly arisen. The organization tax and franchise tax levied by the Comptroller upon corporations are held not to be taxes¡, but charges by the State upon the right to do business in a corporate capacity, a privilege the State may give or tako away. So with the inheritr anee tax; it is held not to be a tax upon property, but a charge upon the succession, also a right the State may give or take away.
Speaking generally of the home rule which the Constitution essays to protect, the courts in many instances have undertaken to define, distinguish and point out what is not a local function as contemplated by the Constitution ; but as to the matter of assessment of property for general taxation they have uniformly held that to be a local function. The class of cases in which the courts have held the function to be exercised not to be exclusively local are such as relate to the exercise of police powers, and instances of these are People v. Draper (15 N. Y. 532); People v. Pinckney (32 id., 377); Metropolitan Board of Health v. Heister (37 id. 661); Metropolitan Board of Excise v. Barrie (34 id. 657); Astor v. Mayor (62 id. 567); People ex rel. Kilmer v. McDonald (69 id. 362); People ex rel. Kilmer v. Cheritree (6 T. & C. 473); Hanlon v. Supervisors of Westchester (57 Barb. 383); City of Syracuse v. Hubbard (64 App. Div. 587); People ex rel. Commissioners, etc., v. Supervisors Oneida (170 N. Y. 105).
In these cases the court in every instance professed to see that the principle of home rule contemplated by the Constitution was not involved for the reason that the function sought to be exercised was not local in such a sense as to deprive the State of its unlimited exercise. In some cases it is true that the prevailing opinion of the court conveys the impression that local self-government as a principle, so far as recognized by the Constitution, is a sort of nebula with limitations as uncertain, unstable and elusive as the tail of a comet (Matter of Allison, v. Welde, 172 N. Y. 421), but all, nevertheless, declare that the Constitution does recognize the principle and protects it against legislative encroachment.
It seems to me that the question of the constitutionality of the act: we are considering hinges wholly upon the question as to .whether! or not the assessment of property for general' taxation is an exclusively local function. If it is conceded to be, or is determined to be, an exclusively local function and, as said by the referee, is a “ system of assessment * * * entrenched in the Constitution to secure to* the People the home rule to which they had always been accustomed and of which the people of our race have always been tenacious,” then it must be the duty of the courts, until the People shall! change the organic law, to see that these secured rights are not¡ unlawfully invaded. It matters not, it seems to- me, how little or how great may be the invasion proposed. Every little violation of the Constitution is as inexcusable as is a larger violation. Considerations of convenience or better service have no place in the discus-! sion or in the determination of this question, If we were authorized to hew away the Constitution every time it binds and so make it run in accord with the legislative idea of public needs we might then take into account the good and the bad which might result from the change.
The learned referee has found that the tangible property hereto
The assessment by a State board of the franchises themselves — the intangible property of a corporation as defined by the amended act —presents perhaps another question. This property is not new property coming to the locality, but has always existed there, though it has never been locally assessed. To assess this property judiciously or by the method adopted by the State board the local assessors in most cases would need to go beyond their precincts. The property can hardly be said to be localized. For instance, a. street surface railway, a telegraph, telephone or pipe line, which runs through several incorporated villages and on the highways of intervening towns, must possess a franchise from each municipality. The value of these franchises separately considered might be very little, but the value combined might be very great. The right to run cars on the highways of a town could only be valuable as connected with the right to run through the other municipalities. These franchises, therefore, are only links in a chain. The chain may have great value, but the links have no value except for their being component parts of the chain itself. It is obvious that to give a proper value to any link the value of the entire chain must be first ascertained, and then an approximate apportionment would not be difficult. But the value of the chain largely depends upon the earning capacity for the time being of the entire property of the corporation used to do the business which the franchises permit to be done, and the value of the chain of franchises, ascertained in the mode adopted by the board of assessors — and no better mode has been suggested — requires a valuation of the entire corporate assets and a separate valuation of all the tangible property in each municipality and elsewhere situated, and then by a process of elimination the value of all the franchises together may be determined. It is possible that-
I advise a reversal, and that the assessment be set aside, on the ground that the amendment to the General Tax Law creating a State Board of Tax Commissioners and giving them power to assess the tangible property on, under and over streets and public places is an invasion of the functions of local assessors, and, in this respect, is a violation of the Constitution.
Dissenting Opinion
The legislative act, the constitutional warrant for which is here challenged, was passed in May, 1899. By its provisions a new species of property was added to the property theretofore taxable by law. This new species of property was-the franchise, right or permission granted by municipalities to use the public streets, highways and public places within the State. This franchise, right or permission was defined by the statute to include the value of the tangible property of the person, copartnership, association or corporation, the owner of the franchise itself, which was used upon the public way. It was provided that this tangible property should be taxed as a part of the special franchise; that the special franchise as thus defined should be assessed by the State Board of Tax Commissioners, and their assessment, as certified, should be entered by the assessors or other officers of the various localities in which said franchises existed in the proper column of the assessment roll. One of the grounds of the relator’s challenge is that this act violates the home rule provision of the State Constitution as found in section 2 of article 10
The contention of the relator is that this constitutional provision is violated by giving to the State Board of Tax Commissioners the assessment, first, of the franchise, and, second, of the tangible property in the street, which, by the act, is made a part of the special franchise subject to assessment by the State officers.
That the Legislature might properly give to the State board the assessment of the franchise seems to me of undoubted right. The Constitution provides that “ all officers whose offices may hereafter be created by law shall be elected by the People, or appointed, as the Legislature may direct.” This provision is a clear index of the constitutional purpose to protect the localities in the home rule which existed at the time of the adoption of the Constitution, and to that extent only. All offices thereafter created are to be filled as the Legislature may direct. By this act the Legislature has in effect created a new office — a franchise tax assessor; and to the extent of the assessment of the franchise, with duties not existing at the time of the adoption of the Constitution. These duties, too, are distinct from and independent of any then existing duties of local officers. An intangible franchise has never been the subject of assessment by local assessors. This is held by the referee below. (See People ex rel. Manhattan R. Co. v. Barker, 152 N. Y. 417 ; People ex rel. Panama R. R. Co. v. Comrs. of Taxes, 104 id. 240.) Most franchises are enjoyed in connection with franchises from adjoining municipalities which have a value in their union, the value of which separately, however, is uncertain and practically undeterminable except by arbitrary apportionment. To assess these franchises, access must be had to the books of the corporation and to other data which it would be difficult if not impracti
By this statute, however, the tangible property of the corporation within the street, used in connection with the intangible franchise, is made a part of the special franchise which the State officers are empowered to assess. The constitutionality of this provision presents a more serious question. This tangible property amounts to upwards of §90,000,000 within the State. It has heretofore since its creation been assessed by the local assessors. It was so assessed at the time of the adoption of the Constitution. By this act this local function, existing at the time of the adoption of the Constitution, has been taken away from the local officers and given to the State board. By what rule of construction can this be justified ?
Chapter 564 of the Laws of 1865 conferred upon the commissioners of Central Park, appointed by the central power, the exclusive care, management and control of portions of Sixth avenue and certain other streets in the city of Xew York for the purpose of regulating, grading and otherwise improving the same. In Astor
Legislature from clothing officers appointed by it for the purpose of carrying out a public improvement, with power to perform acts which have an especial relation to and connection with such improvement, simply because the power to perform such acts was, at the time of the adoption of the Constitution, vested in local officers elected by the People.” In discussing that act, Judge Miller, writing for the court, says: “ It would be carrying the doctrine of non-interference with local officers far beyond any reported case, to hold that in no case whatever could any of the powers existing in a local officer at the time of the adoption of the Constitution, be taken away without violating the provision cited.” In People v. Draper (15 N. Y. 543), Denio, Ch. J., in writing of this provision of the Constitution of 1846, says: “ If we were to establish the principle that the Legislature can never reduce the administrative authority of counties, cities or towns; can never resume in favor of the central power any portion of the jurisdiction of those local divisions, or change the partition of it among them, as it existed when the Constitution was adopted, we should, I think, make an impracticable government.”
The intimate relation of the tangible property in the street to the intangible property to which it is an incident is seen at a glance. For many purposes they are legally inseparable. In People v. O'Brien (111 N. Y. 47) the court in its opinion says: “ In the former class it has been held that at common law real estate acquired for the use of a canal company could not be sold on execution against the corporation separate from its franchise so as to destroy or impair the value of such franchise. (Gue v. Tide Water Canal Co., 24 How. [U. S.] 257.) And by parity of reasoning it must follow that the tracks of a railroad company and the franchise of maintaining and operating its road in a public street are equally inseparable in the absence of express legislative authority providing for their severance.” In Syracuse Water Co. v. City of Syracuse (116 N. Y. 182) the opinion reads: “ The corporate rights and the
But it is urged that the tangible and intangible are not inseparable for the purpose of assessment. Possibly they are not absolutely inseparable. As shown by the evidence the value of the intangible franchise must be determined by taking the-value of the whole property, tangible and ' intangible, and deducting therefrom the value of the tangible. Thus the determination of the value of the tangible property is a prerequisite to the valuation of the intangible. Their values and use depend upon each other. Those values thus interdependent are given to the State board to determine. They are reasonably connected for the purpose of assessment and taxation". And this is all that is necessary to authorize the Legislature to attach the tangible to the intangible property for this purpose. In the Astor case, above cited, the several avenues, jurisdiction of which, was taken from the local assessors and given to the State officers, were outside of Central Park, .and not within the jurisdiction of the park commissioners. These avenues might have been left to the local officers to improve. There was no absolute necessity that they be transferred to the park commissioners who were" appointed by the central power. Nevertheless, by reason of their intimate relation and connection with the park and with the scheme of park improvement, the Legislature was hel<j authorized to take from the local officers functions which had theretofore been local functions and transfer them to these State officers. If, as part of the park improvement, the Legislature had thought best to give to the park commissioners the permanent control of the streets surrounding the park, I apprehend that the right to do so would be recognized by the courts as one reasonably connected with and incidental to the scheme of park improvement which the Legislature was authorized to adopt and execute.
Nor do I find any authorities which conflict with the conclusion reached. The learned presiding justice deems this case controlled by the case of People v. Raymond (37 N. Y. 428). That case
The learned referee, before whom this case was originally tried, has admonished ns of certain rules of construction by which we must be guided in the determination of this question. He says in his opinion : “-There is also a rule many times announced by judges that the legislative will is not to be thwarted as in conflict with the Constitution, unless such conflict is clear and undoubted; and that whenever an act of the Legislature can be so construed and applied as to avoid conflict with the Constitution and give it the force of law, such construction should be adopted. The Legislature has supreme legislative power, except as such power is limited in the Federal or State Constitutions, and we must be able to point to some unmistakable constitutional limitation before such power can be curtailed. A further rule must, however, also be observed, that a thing within the intent of the Constitution, if that intent can be gathered from the instrument itself considered in all its parts or from the history connected with it of which a court can take notice, is, for all purposes, to be regarded as within its words and terms, and that the plain purpose of the Constitution will hot be thwarted by a too close adherence to its letter.”
' Those functions have been taken from local constitutional officers and given to State officers. To question the constitutional right to accomplish this purpose would be generally recognized as quibbling over the constitutional restriction. The Constitution should receive such construction as will protect the People in the rights intended to be reserved, and at the same time render possible the growth and prosperity of the State. The limitation which the majority of the court has here found is, at the most, an implied limitation, unwarranted,- as I think, either by authority or by any reasonable conception of the intent of the framers of the Constitution. I am impressed with the conviction that to hold this law invalid is to pervert the will of the People of the State as written in their fundamental law.
Dissenting Opinion
The Special Franchise Tax Law, so called (Laws of 1899, chap. 712), amended the Tax Law (Laws of 1896, -chap. 908, § 2, subd. 3) so that the terms “ land,” “ real estate ” and “ real property,” as used in the Tax Law, should include not only all surface, underground or elevated railroads, but “ the value of all franchises, rights or permission
The act did not interfere with the office of assessors or other local officers charged with the duty of making assessments. The only power taken from such local - officers was the power to assess the tangible property in the streets, highways or public places which was defined by the law to be, and to be taxed as, a part of the special franchise.
The most important question in the case is whether the Legislature had the power, under the Constitution of the State, to take this function from the local assessors. That the Legislature had the power to commit to the State Board of Tax Commissioners the function of assessing the intangible property constituting a part of the special franchises is not, I think, open to serious question. Such intangible property was made taxable for the first time in this State by the amendment, and the Legislature had the undoubted right to
As to whether or not the Legislature could commit to the State Board of Tax Commissioners the power to value the tangible property in the streets, highways or public places forming a part of these special franchises is a more serious matter. My examination of this question has led me to a different .conclusion from that reached by some of my associates, and I will, as briefly as I may, state the reasons for my. conclusion.
The home rule provision of the State Constitution which is brought in question here is found in section 2 of article 10, and is as follows: “ All county officers whose, election or appointment is not provided for by this Constitution, shall be elected by the electors of the respective counties or appointed by the boards of supervisors, oi* other county authorities, as the Legislature shall direct. All city, town and village officers, whose election or appointment is' not provided for by this Constitution, shall be elected by the electors of such cities, towns and villages, or of some division thereof, or appointed by such authorities thereof, as the Legislature shall designate, for that purpose. All other "officers, whose election or appointment is not provided for by this Constitution, and all officers, whose. offices may hereafter be created by law, shall be elected by the People, or appointed, as the Legislature may direct.” '
The office of assessor is not mentioned in this section, nor are the functions of any local officer defined therein. While this section expressly secures to the localities the selection of their local officers it does not in express terms protect the functions of such officers from legislative or State interference, But the appellant’s counsel insist, and no doubt rightly, that we may read into the Constitution by implication from the history of the State at, or prior to, the time of the adoption of the Constitution, that the assessment of property for the purpose of taxation is a local function. . So far I may agree with them and find ample authority in the decisions of the courts for so doing. But when they insist that under the implied provisions of the Constitution such assessment is exclusively a local
While an act of the Legislature must stand the. test as to whether its provisions are counter to the clearly implied as well as to the express provisions of the Constitution, yet I cannot conceive it to be the duty of the court to aid in reading into the fundamental law matters of doubtful or uncertain implication in order thereby to effect the condemnation of an otherwise valid act.
In considering this question some elementary principles may first be alluded to. The. legislative power is absolute and unlimited except as restrained by the State or Federal Constitution. (Bank of Chenango v. Brown, 26 N. Y. 467; People ex rel. McLean v. Flagg, 46 id. 401; Lawton v. Steele, 119 id. 232; Railroad Company v. County of Otoe, 16 Wall. 667.) The power to tax is inherent in government and is a legislative power limited only by constitutional provisions. (Town of Guilford v. Supervisors of Chenango Co., 13 N. Y. 143; Clarke v. City of Rochester, 24 Barb. 446.) The security for the abuse of this power is to be found in the .responsibility of the members of the Legislature to their constituents and not in the courts. (People v. Mayor, etc., of Brooklyn, 4 N. Y. 426.) Cities, counties and towns are but the instrumentalities for the convenient administration of local government; upon them, subject to constitutional limitations, the Legislature may confer the power to tax to the extent necessary to good government, and the imposition of a tax by cities, counties or towns for their support is as much an exercise of the taxing power of the State as a tax imposed directly by the State. (25 Am. & Eng. Ency. of Law [1st ed.], 80.) The power to assess is but an incident of the power to tax. The function of assessing for the purpose of taxation is a governmental agency for the proper division of the burdens of taxation, and is but one of the elements in rendering the power of taxation effective.
In Town of Guilford v. Supervisors of Chenango Co. (supra) it was said : “ Our State government is an independent existence, representing. the sovereignty of the People. The power of the
If the Legislature possesses such power with respect to taxation I can see no reason why, with respect to a function which is but a part of the governmental machinery in carrying into effect the laws relating to taxation, the Legislature may not lawfully provide, as has been done by the amendment in question, that the State Board of Tax Commissioners may value the tangible property in the streets as a portion of the special franchises made taxable by the amendment.
. The State has a direct interest in local assessments, for upon these assessments State, as well as local taxes, are paid. It has an indirect interest in them, so far as they are made the basis of local taxation, because of its regard for the efficiency of local government and for the well-being of all the municipalities which go to make up the State.
At the time of the adoption of the earlier Constitutions, when it is claimed that the principle of' local assessments became a part of our governmental system, there was not a railroad track, a telegraph line, a gas main or'an electrical subway in existence. The right to assess and tax these various kinds of property in the streets has from time to time, and mostly in comparatively recent years, been conferred upon the local authorities by the Legislature. If the Legislature can increase the powers and functions of the assessors as it has done repeatedly, why may it not take from these powers and functions at least to the extent of that which it has given ? If this tangible property in the streets had always been taxable there would be more force in the contention that the local assessors had a constitutional right to value it for taxation, but the right to assess it at all has been given since the adoption of the earlier Constitutions, and this right is all that has been withdrawn by the act in question.
The Constitution has not stood in the way of the withdrawal by the State of various functions from many local officers other than.
But it is said that the decisions in these cases and in others of analogous character were justified in the exercise of the police power of the State, and not otherwise. The court, however, failed to put its decision in most of these cases on that ground, nor did it give that question any prominence in any of them. Other sufficient reasons were found for the conclusions reached.
' While it is entirely correct to say that the State has a great interest in maintaining good order through an efficient police force, in the protection of property and lives by well-conducted fire departments, in promoting the public health, in the regulation of the liquor traffic, in the maintenance of good roads and in other public improvements, yet none of these -matters are of greater concern to the State than the power to exist, which depends upon the right in the Legislature to levy taxes and, as incidental thereto, to have some power concerning assessments for that purpose.
The cases which are cited to support a contrary doctrine are cases where the Legislature attempted to abolish local offices in the face of. the express terms of the Constitution, and confer tlie functions of such offices upon officers of State selection. The case of People v. Raymond (37 N. Y. 428) is one of these cases.
The appellant relies largely upon that case for its contention that the assessment of property for the purpose of taxation is exclusively a local function. That was an action to determine the title of the defendant to the office of commissioner of taxes and assessments of the city and county of Xew York, and the only question in the case
The intangible property constituting a part of these special fran chises is made taxable by the amendment in question for the first time. It is of very large value. It is so closely related to, and so inseparably connected with, the tangible property in the streets constituting a part of the special franchises, that it would be very difficult if not impracticable to value the intangible separate and distinct from the tangible property. (People v. O'Brien, 111 N. Y. 1.) The State board has not so valued it in this case, and this court has held in an unreported case that a provision in a writ of certiorari requiring that board to state the values upon the tangible and. intangible property separately was not justified under the law.
To hold that the Legislature cannot commit to a State authority the duty of valuing for the purpose of taxation tangible property in the streets to the extent permitted by the amendment in question and under the circumstances existing here requires, in my opinion, altogether too strict and illiberal a construction of the Constitution.
I think the Legislature had the right not only to subject the large amount of intangible property existing as a part of these special franchises to the taxing power of the State, but also to provide, as it did, in view of the changed conditions arising from the advancement and progress of our people from those which formerly existed, for the assessment of this intangible and tangible property together by State officers, and that in so doing it has still left to the localities as large a measure of home rule as they enjoyed in this respect when the local function of assessing property for taxation became a part of our system.
So far reference has been had to the validity of the amendment under the State Constitution. With reference to its validity under the Federal Constitution and to all the other questions discussed by the learned referee in the various opinions written by him, I agree with .his reasoning and also with his conclusion and that of the Special Term, that the amendment is a valid exercise of legislative power.
I think the order should be affirmed, with costs.
Order appealed from reversed and assessment vacated.
The above decision was on January 23, 1903, amended so as to read as follows : Order appealed from affirmed on the facts and reversed on the law, and assessment vacated.
Form of order, if not agreed upon, to be settled by Chase, J.
